US Job Openings Show Unexpected Increase in August

Investing.com — US job openings unexpectedly increased slightly in August, potentially indicating some resilience in cooling labor demand in the third quarter.

The closely-monitored Job Openings and Labor Turnover Survey revealed that available positions, which serve as a proxy for labor demand, rose to 8.040 million on the final business day of August, up from an upwardly-revised 7.711 million in July. Economists had predicted that the so-called JOLTS report would dip marginally to 7.640 million.

In July, the figure decreased to its lowest point in three-and-a-half years, seen as a possible signal that the US jobs market was losing steam—but in an orderly manner.

These figures arrive after Federal Reserve Chair Jerome Powell indicated that the Fed would likely resort to more traditional quarter-point interest rate cuts moving forward while emphasizing that the future trajectory of borrowing costs is not predetermined.

Powell stated that the rate-setting Federal Open Market Committee is not “in a hurry to cut rates quickly” despite a significant 50-basis point cut at the Sept. 17-18 meeting.

He defended last month’s decision, stating it demonstrated the FOMC’s “growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be sustained amid moderate economic growth and inflation moving sustainably down to 2%.”

Powell further asserted that the economy remains in “solid shape” and committed to utilizing “our tools to keep it there.” He mentioned at an event in Tennessee that “two more cuts”—totaling half a percentage point—would be justified by the end of 2024, contingent on the economic outlook.

Elsewhere on Tuesday, the Institute for Supply Management’s manufacturing purchasing managers’ index clocked in at 47.2 for September, matching August’s figure. Analysts had anticipated the number would read 47.6. A level below 50 indicates contraction.

The non-manufacturing PMI, which is more representative of the crucial services sector, is expected to be released on Oct. 3 and is forecast to rise to 51.6 from 51.5 in the previous month.

Analysts at Bank of America recently predicted that the PMI data would indicate that broader economic activity in the US is “cooling, not crumbling.”