US job openings fall to lowest level since early 2021 as consumer confidence recovers

Tuesday’s disappointing Labor Department report was countered by a Conference Board poll that showed consumers’ perceptions of the labor market improved significantly in October, helping lift consumer confidence to a nine-month high.

Hurricanes and aerospace worker strikes are expected to temporarily dampen job growth in October. Economists say the labor market picture has not changed significantly since wages rose sharply in September.

“Labor market data is mixed, but the latest consumer survey conducted in October suggests the drop in job openings at the end of September could be a red herring in the story being written about economic weakness,” said Christopher Rapkey, the company’s chief economist. FIRST BONDS.

Job openings, a measure of labor demand, fell by 418,000 to 7.443 million by the last day of September, the lowest level since January 2021, the U.S. Department of Labor’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Study. or JOLTS report. .

Data for August was revised downward to show 7.861 million unfilled job openings instead of the previously reported 8.040 million. Economists polled by Reuters had forecast 8.00 million job openings. There were 1.09 jobs for every unemployed person, little changed from 1.10 in August.

The number of vacancies fell by 325,000 in the southern US, much of which was emptied by Helen and Milton. The number of vacancies in the West, East and Northeast decreased slightly.

In the health and human services sector, the number of unfilled positions nationally fell by 178,000. There were 79,000 fewer vacancies in state and local governments excluding education, and the number of open positions in the federal government fell by 28,000. But the number of vacancies increased by 85,000 in the finance and insurance sector.

The vacancy rate fell to 4.5%, the lowest level since December 2020, from 4.7% in August. Hiring increased by 123,000 to 5.558 million in manufacturing, retail, and health and social care. The hiring rate rose to 3.5% from 3.4% in August.

Layoffs increased by 165,000 to 1.833 million. They were driven by manufacturing, professional and business services, and the accommodation and food service sectors. The layoff rate rose to 1.2%, the highest level since March 2023, from 1.0% in August. Fewer people left their jobs, pushing the layoff rate up to 1.9% from 2.0% in the previous month.

This was the lowest level of layoffs since June 2020, suggesting that wage pressures will continue to subside and allow the Federal Reserve to continue cutting interest rates.

Stocks were mixed on Wall Street. The dollar rose against a basket of currencies. US Treasury yields rose.

NOISY WORK DATA

Nonfarm payrolls are expected to increase by 115,000 jobs in October after rising by 254,000 in September, a Reuters poll of economists found. This would be the smallest amount in six months. The unemployment rate is projected to remain unchanged at 4.1%.

The US central bank is expected to cut interest rates by 25 basis points at its meeting next month after starting its easing cycle with an unusually large half a percentage point cut in September.

This decline in borrowing costs, the first since 2020, led the Fed to cut its policy rate to a range of 4.75%-5.00%. He raised rates by 525 basis points in 2022 and 2023 to curb inflation.

In a separate report Tuesday, the Conference Board said consumer confidence rose to a nine-month high in October as perceptions of the labor market improved. Consumers showed little concern about the November 5 US elections.

The share of consumers who think jobs are “abundant” rose to 35.1% from 31.3% in September. About 16.8% of consumers said they were having a “difficulty finding work,” up from 18.6% last month.

The so-called labor market differential, based on respondents’ views on whether jobs are plentiful or hard to find, increased to 18.3 from 12.7 in September. This indicator correlates with the unemployment rate in the Department of Labor’s monthly employment report.

More consumers plan to buy cars over the next six months, with the share rising to its highest level since December 2020.

Plans to purchase other manufactured durables such as refrigerators, washing machines and vacuum cleaners also rose, but the share of consumers planning to buy a home remained unchanged amid persistently high prices and rising mortgage rates.

“This jump is somewhat surprising to us as the U.S. presidential election is just around the corner,” said Jeremiah Kohl, economic analyst at Wells Fargo. “Historically, election uncertainty has impacted consumer sentiment in the months leading up to an election. However, the election continues to take a backseat to economic worries in the minds of consumers.”

A separate report from the Commerce Department’s Census Bureau showed the merchandise trade deficit widened 14.9% as imports rose to $108.2 billion last month, the highest level since March 2022, prompting economists to cut gross domestic product estimates for the third quarter. .

However, most of the imports ended up in the form of inventories at retailers, which should soften the blow to GDP from trade.

The government plans to release preliminary GDP estimates for July-September on Wednesday. The Atlanta Fed lowered its estimate for third-quarter economic growth to 2.8% annualized from 3.3%. The economy grew 3.0% in the second quarter.

Merchandise imports rose 3.8% to $282.4 billion, also the highest level in two and a half years, likely because businesses stockpiled goods in anticipation of a dockers’ strike that was short-lived. Merchandise exports fell 2.0% to $174.2 billion.

Wholesale inventories fell 0.1% after rising 0.2% in August. However, retail inventories rose 0.8% after rising 0.7% in August.

“Due to the relative strength of imports, trade will remain a drag on growth in coming quarters,” said Matthew Martin, senior U.S. economist at Oxford Economics.