Like the tortoise in the classic fable The Tortoise and the Hare, the labor market remains slow and steady.
The Bureau of Labor Statistics released its September Job Openings and Labor Turnover Survey (JOLTS) today. While hires and separations were little changed from the previous month, the total number of job openings fell to 7.4 million from 8 million in August, the lowest level since September 2021.
Bureau of Labor Statistics
“You’ll have to take the September numbers with a grain of salt…because you’ve got some hurricane impact, and there’s some strike impacting data in there, so that’s going to throw off the numbers,” said Rajesh Namboothiry, SVP at Manpower US. “The data is a little distorted for September, although I do see steadiness.”
The labor market is strong despite recent events. As the southeast faced hurricane devastation in September, the region’s job openings declined significantly, dropping by 325,000 in the South, compared to 63,000 in the West, 24,000 in the Midwest, and 8,000 in the Northeast.
Despite this, Rachel Sederberg, senior economist and director at research firm Lightcast, told HR Brew the labor market is still strong and steady, and returning to a pre-pandemic normal. Job openings and hiring may be down, she said, but they’re not indicative of an unhealthy workforce.
“We need to remind ourselves too about longer-term trends…because that pandemic period was just so unusual,” Sederberg said. “We have a shorter attention span or shorter memory, and maybe should take a little bit longer view…We are very much in a good normal [with] these numbers.”
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Hiring has also stalled, Namboothiry said, because employees are hunkering down amid what’s become known as the “Big Stay.” Instead of hiring new employees, they’re focusing on how to get the most out of their current ones.
“Employers are counting on productivity as the lever for them to drive some growth in their business,” he said. “Hiring is mostly for replacement versus growth, so it’s just replacing churn versus growing the business.”
Changes on the horizon. The Federal Reserve Bank issued a 0.5 rate cut in mid-September, and many companies expect to increase spending as a result. Sederberg said people pros will likely see the ripple effects in the months to come, but not all at once.
“It takes companies some time to decide what they want to do, or how they want to do it, or where they might want to open a new facility, or expand their workforce, so those decisions don’t come right away,” she said. “We could also potentially expect additional [fed] cuts in the months and year to come.”
Despite the outcome of the presidential election in early November or potential future interest rate cuts, Namboothiry said many employers will pick up hiring efforts for next year “at an accelerated pace.”
He suspects the rest of this year will be a “wait and watch” game. “[Companies] are making sure that they’re managing their attrition and churn. They’re engaging their workforce, and that’s the strategy they’re going to be on for the rest of the years. We’re not going to see any remarkable difference.”
