The number of job openings fell dramatically in August, by 1.1 million, showing the start of a big U.S. labour gap. The number of available positions totalled 10.05 million, a decrease of 10% from July, according to the Bureau of Labor Statistics. This was the biggest one-month decrease since the beginning of the Covid pandemic in April 2020.
However, some positive trends were seen with the number of hires rising. Although the number of people quitting jobs increased by 100,000, to 4.16 million. The biggest fall in vacancies was seen in healthcare and social assistance, by 236,000. Retail also decreased by 143,000.
In the U.S., the job market has driven inflation as demand outweighed the labour pool – driving up wages. Hourly earnings increased by 5.2% over the 12 months before August, although when adjusted for inflation, real earnings decreased by 2.8%.
Robert Frick, a corporate economist at Navy Federal Credit Union, explained: “Job openings took a major dive in August, falling by more than about 1 million, but they still total more than 10 million. That and other data point to a jobs market that’s still challenging for employers.” He added, “But judging by the drop in openings and the high number of Americans who entered the labour force in August, almost 900,000, the worst of the tight labour market is over.”
The Federal Reserve is expected to continue with its plan to go ahead with a fourth consecutive 0.75 percentage point interest rate hike.