Source: Economics Group of Wells Fargo Bank, N.A.
Summary
The September employment report a few weeks back shook up the recent narrative on the labor market, as it showed robust job growth, steady unemployment and smoldering wage growth. The latest release of September labor market data, however, suggests that employment conditions continue to soften. Job openings fell by 418K in September from a downwardly revised reading in August. While the number of job openings per unemployed, at 1.1, is consistent with the labor market remaining solid in an absolute sense, employers and employees are still in a wait-and-see mode. The share of workers quitting their job fell to a four-year low in September, and while despite ticking up last month, layoffs remain near historic lows.
No Stabilization in the Jobs Market Yet
Total job openings dropped to 7.44 million on the last business day of September, a decline of more than 400K from August’s downwardly-revised reading of 7.86 million. The headline miss and negative revision to August run somewhat contrary to the latest readings on small business hiring plans and overall Indeed job postings, which suggest that the pullback in labor demand is decelerating (chart). However, the preponderance of the data has yet to persuade us that labor demand has stabilized.