Job openings fell by more than expected in August, a sign that the Federal Reserve’s efforts to cool the labor market may be working.
Openings fell to 10.1 million in August, the Labor Department said Tuesday. This is 1.117 million below the number of open positions in July, the largest drop on record apart from April of 2020.
Even with the drop, the number of openings is tremendously high. Prior to 2021, openings had never reached eight million.
This is the first time openings have fallen below 11 million since November 2021.
Economists had forecast 11.15 million openings. The prior month’s figure was revised down from 11.239 to 11.17 million.
The Department of Labor’s Job Openings and Labor Turnover Survey, known as JOLTS, has become a crucial barometer of the tightness of the labor market. The decline in openings brings the ratio of job vacancies to unemployed people down to 1.7 to one, a historically high level but well off the two to one ratio seen for most of this spring and summer.
The number people voluntarily quitting their job is also viewed as a measure of labor market strength since workers are more likely to leave when they have another job waiting or expect to easily find a new job. This rose to 4.16 million from 4.06 million, near the all-time high.
Federal Reserve Chairman Jerome Powell has said that he hopes to bring the number of openings down in order to contain inflation.