What the August JOLTS report means for the economy

We got fresh JOLTS data this morning. That’s the monthly job openings and labor turnover survey from the Bureau of Labor Statistics. The headline is at first glance is not very headline-y: little has changed in the labor market since last month.

But if you dig into the details, there are signals that the job market is continuing to cool, which is not necessarily a bad thing, as there are several economists who are taking the chilly numbers as good news.

One of the signals that economists look for in JOLTS is job openings: the number of vacant positions that employers want to fill.

Job openings might have bounced back up in August, but Pavlina Tcherneva, president of the Levy Economics Institute at Bard College, isn’t ready to call it a turnaround.

“The job openings have been on a steady decline since 2022 and that uptick does not suggest any change in that trend,” Tcherneva said.

Plus, that job openings number is kind of a squishy figure, she said. Who knows if those jobs all get filled, or when. Tcherneva prefers harder, indisputable numbers like quits and hires, which were down again in August.

“It just corroborates what we’ve been seeing for a few months now that the labor market is cooling,” Tchervena said.

Ari Shwayder teaches economics at the University of Michigan. He said the hiring boom we’re coming down from wasn’t sustainable anyway.

“I don’t necessarily see that as a bad thing,” Shwayder said. “People were switching jobs, and so that felt really good to a lot of workers. And now, we’re sort of back down to what I would think of as a more normal economy, which is great, but feels less good than it did two years ago.”

That might be because since so many people switched jobs a couple years ago, they’re not looking to switch jobs now, said senior U.S. economist Josh Hirt with Vanguard.

“People are working in those positions,” Hirt said. “It does take some time to get acclimated, and so that could be a leading cause for why you’re seeing some of that overall quits reduced currently.”  

People are staying in their jobs. And if you looked at just the quit rate, you might think the labor market is worse than it really is.

“The current rate that we’re seeing quits would probably be associated historically with an unemployment rate that’s above 5% rather than the low 4% that we’re seeing now,” Hirt said.

Hirt said he expects the unemployment rate to rise a bit more before leveling off, but not to the point of causing any broader concern, at least in the near-term.