Job openings dropped by 1 million last month—here’s why – CNBC

by | Oct 4, 2022 | Jobs

The number of job openings dropped by 1.1 million postings in August compared with the month prior, the second-largest slide in the history of the Job Openings and Labor Turnover report, which began collecting data in 2000.Job openings dropped by 10% to 10.1 million in August from 11.2 million in July. Despite that, opportunities are still historically high, and a rapid clip of quitting and hiring mean it’s still largely a worker’s market — it’s just cooling a bit as the Federal Reserve intended.The biggest surprise is the drop didn’t happen sooner in June when the Fed raised its benchmark interest rate by 0.75 percentage point in an effort to curb inflation, says Julia Pollak, chief economist at ZipRecruiter. She says online job postings already started falling by June, and she expected to see Labor Department data match that timeline. Instead, openings rose to 11 million in July.1 million jobs goneThe August plunge in job openings is a result of employers reducing their future hiring plans, Pollak says, or only hiring to replace people rather than hiring for new positions to grow their team.”They’re hiring people only when absolutely necessary,” she says. Other industries may be “tilting back to normal now that they’re fully staffed.”Jobs that saw the biggest declines in postings in August include those in health care and social assistance, other services (like equipment repair and personal care services), and retail trade.Pollak expects this downward trend to continue among industries that are sensitive to rising inflation, falling stock prices and contractions in other parts of the economy — think: finance, real estate and construction.In other service sectors, though, slower hiring intentions could exacerbate staffing shortages and lead to longer wait times, slower service or limited availabilities at places like restaurants, stores and airports, Pollak says.It could spell trouble for a hectic holiday …

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