Job openings fell in August as quits rate reached record high

Job openings fell in August as quits rate reached record high
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Job openings fell in August for the first time this year as surging coronavirus cases upended the labor market, according to data released Tuesday by the Labor Department.

U.S. job openings declined to 10.4 million in August from a record high of 11 million in July while hires also fell from roughly 6.8 million in July to 6.4 million. The leisure and hospitality industry saw the steepest declines in openings and hires as skyrocketing cases of COVID-19 hit restaurants and bars particularly hard.

The quits rate, which measures what proportion of employed Americans left their jobs voluntarily, also reached a record high of 2.9 percent in August. Quits made up 4.3 million of the 6.1 million total job separations in August, which also includes layoffs, firings, retirements, death and disability.

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“The August Job Openings and Labor Turnover Survey (JOLTS) confirms the source of the recent slowdown in the US labor market. The tepid employment growth we’ve seen in recent months has been at least partially the result of a decline in hiring appetite,” wrote Nick Bunker, economic research director at Indeed. 

“The question is whether this is a temporary speed bump due to a surge in COVID cases or if demand will continue to slacken in the months ahead.”

The U.S. added just 366,000 jobs in August and 194,000 in September, according to data released Friday by the Labor Department, as the delta variant surge kneecapped an economy already struggling with inflation driven by supply chain snarls.

While President BidenJoe BidenHow 'Buy American', other pro-US policies can help advocates pass ambitious climate policies Overnight Defense & National Security — Presented by Raytheon Technologies — Biden backtracks on Taiwan Photos of the Week: Manchin protestor, Paris Hilton and a mirror room MORE said Friday the labor market has made “steady progress,” employment growth has fallen off considerably from July, when the U.S. added more than 1 million jobs before the delta surge took hold later in the month.

“Employment growth has already slowed in recent months since the sector is especially sensitive to the pandemic. The decline here suggests that the rising case counts in August tempered employer demand for new hires,” Bunker said, highlighting a 20-percent increase in the quits rate for leisure and hospitality workers.

The recent decline in COVID-19 cases could bode well for the labor market and relieve some pressure on hard-hit sectors. The Sept. 6 expiration of federal jobless benefits has also done little to spur labor force participation so far, but could shape the progress of the recovery as more than 6 million Americans face an uncertain economy with no unemployment aid.

“It will take some time for the economy to recoup the jobs lost during the pandemic, but we expect further progress will be made into 2022 as the Covid situation has improved, schools have largely reopened, and emergency unemployment benefits have ended,” wrote Lydia Bossour, lead US economist at Oxford Economics, in a Tuesday analysis.