Jobs Market Is Cooling, but With Few Layoffs

Companies are posting fewer openings, not cutting jobs
By Newser Editors and Wire Services
Posted Sep 1, 2023 9:09 AM CDT
Jobs Report Shows Labor Market Is Still Resilient
Workers transport equipment at Boston Metal on Jan. 25, 2023, in Woburn, Mass.   (AP Photo/Steven Senne, File)

The nation's employers added a solid 187,000 jobs in August in a sign of a still-resilient labor market despite the high interest rates the Federal Reserve has imposed. The job growth marked an increase from July's revised gain of 157,000 but still pointed to a moderating pace of hiring compared with earlier this year, the AP reports. The June gain was also revised downward, from 185,000 to 105,000, CNN reports. The unemployment rate rose from 3.5% to 3.8%, the highest level since February 2022, though still low by historical standards. The shutdown of the big trucking firm Yellow and the strike by Hollywood actors and writers are thought to have kept a lid on August job growth.

A decelerating job market could help shift the economy into a slower gear and reassure the Fed that inflation will continue to decelerate. The Fed's streak of 11 interest rate hikes have helped slow inflation from a peak of 9.1% last year to 3.2% now. Given signs that inflation has continued to ease, many economists think the Fed may decide no further rate hikes are necessary. The central bank hopes to achieve a rare "soft landing," in which its rate hikes would manage to slow hiring, borrowing, and spending enough to curb high inflation without causing a deep recession. So far, the job market has been cooling in the least painful way possible—with few layoffs.

The unemployment rate is barely above a 50-year-low and the Labor Department reported Thursday that the number of Americans applying for unemployment benefits—a proxy for job cuts—fell for a third straight week. Instead of slashing jobs, companies are posting fewer openings—8.8 million in July, the fewest since March 2021. And American workers are less likely to leave their jobs in search of better pay, benefits, and working conditions elsewhere: 3.5 million people quit their jobs in July, the fewest since February 2021. A lower pace of workers quitting tends to ease pressure on companies to raise pay to keep their existing employees or to attract new ones.

(More jobs report stories.)

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