US August JOLTS data mirror softening in payroll growth

The US Job Openings and Labor Turnover Survey (JOLTS) reported total job openings fell to 5.370mn in August, down from the revised July estimate of 5.668mn and below consensus expectations (5.580mn). The 298k decline was driven by fewer openings in many service-sector industries, as well as for government employment. Trade, transportation and utilities (-38k), professional and business services (-73k), education and health services (-57k), and leisure and hospitality (-67k) all had declines in labor demand on the month.

Openings for government jobs fell 36k. These declines brought the job openings rate down two-tenths, to 3.6%. Elsewhere, the separations rate was unchanged at 3.4%. The quits rate, a component of total separations that many view as an indicator of labor market confidence, held steady at 1.9%. Combining the job openings data with figures from the Labor Department's household survey shows that the number of unemployed job seekers per job opening was little changed at 1.5 in August, indicating that labor market slack is at low levels.

"The softening in labor demand evident in the JOLTS data mirrors the slowing in payroll employment growth during the month; nonfarm payroll growth slowed to 136k in August from 223k in July, as a spike in financial market volatility crimped confidence and likely led businesses to pare back hiring temporarily. We do not see this slowing as the start of a new trend; we expect labor demand to improve and lead payroll growth to bounce back to the 200k/month range", says Barclays.