Despite Job Openings Rising In August to 9.6 Million, Small Business Job Openings Decline
Although there were fewer small business openings, wages are still growing and overall job rise stokes fears of additional interest-rate increases.
Despite the Federal Reserve attempting to cool down inflation for the past year by increasing interest rates, though some say it’s cooling down, the ongoing tight labor market is still tight with job openings outnumbering unemployed workers, according to data published on Tuesday.
However, despite the growth in overall job openings, small business job openings actually declined by more than 200,000 jobs.
According to the Bureau of Labor Statistics’ (BLS) JOLTS Report1 [in PDF] released on Tuesday, the number of job openings increased from a revised 8.92 million to 9.61 million on the last business day of August.
“Over the month, the number of hires and total separations changed little at 5.9 million and 5.7 million, respectively,” the BLS reported. “Within separations, quits (3.6 million) and layoffs and discharges (1.7 million) changed little.”
The jump in job openings was “fueled by a surge in white-collar postings, highlighting the durability of labor demand,” reported Bloomberg.
“The ratio of openings to unemployed people was little changed at 1.5,” according to Bloomberg. “At its peak in 2022, the ratio was 2 to 1.”
“While overall demand increased significantly from July, (8.8 million job openings), demand for talent by small businesses declined month-over-month. For businesses with 1-9 employees, there was a decline of more than 200,000 job openings,” according to a RedBalloon.com blogpost.
“Overall, 59% of [small business] owners reported hiring or trying to hire in August, down two points from July,” according to a report released by the National Federation of Independent Business in August.
“The labor market is cooling down,” stated Nick Bunker, head of economic research at the Indeed Hiring Lab, on X (formerly Twitter) Tuesday.
However, Bunker noted, quitting held steady at 2.3%, its pre-pandemic average.
“If this key indicator can continue to stay resilient,” he wrote “wage growth will continue to slow but settle in at a still-rapid pace.
”I'm going to need to see a lot more data before I think the underlying reality of the US labor market has changed,” Bunker concluded. “It's cooling down, but still retaining heat.”
The stock market declined slightly over fears the Federal Reserve may raise interest rates further.
JOLTS Report stands for Job Openings and Labor Turnover Survey