(Oct 29): US job openings fell in September to the lowest since early 2021 and layoffs picked up, consistent with a slowdown in the labour market.

Available positions decreased to 7.44 million from a downwardly revised 7.86 million reading in August, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed on Tuesday. The median estimate in a Bloomberg survey of economists called for eight million openings.

Job openings have been on a downward trend for most of the past two years, and this report showed vacancies declined broadly across industries. The number of layoffs rose to the highest since January 2023, while fewer workers voluntarily quit their jobs — a sign of less confidence in their ability to find a new one.

Other indicators point to a still-strong labour market and economy, which has prompted traders to pare back bets that the Federal Reserve will opt for another big interest-rate cut next week. A separate report on Tuesday showed US consumer confidence increased in October to the highest level since the start of the year.

The data precedes Friday’s October employment report, which may be difficult to parse given a strike by Boeing Co workers and a pair of destructive hurricanes. Payrolls are expected to moderate substantially from September’s blowout pace, while the unemployment rate is seen holding at 4.1%.

Metric September Reading Lowest Since...

Job openings 7.44 million January 2021
Layoffs level 1.83 million January 2023
Quits level 3.07 million August 2020

Other major releases this week include the government’s first estimate of third-quarter economic growth as well as September inflation, rounding out the last batch of data before next week’s presidential election, in which the economy looms large. The Fed’s policy meeting is just two days later.

The pullback in September vacancies was led by healthcare and social assistance, government and accommodation and food services — which is to be expected after the peak summer season.

“The decline in job openings stands in stark contrast to most of September’s labor-market data. We think declining demand for workers will become increasingly evident across labor indicators in months ahead,” says Stuart Paul of Bloomberg Economics.

The JOLTS data can be choppy, due in part to the survey’s relatively small sample size and dwindling response rate. Stephen Stanley, chief US economist at Santander US Capital Markets, finds a similar measure of job openings from recruiting site Indeed to be more reliable and timely instead.

“The extreme volatility in the JOLTS job openings data is beginning to wear thin for me,” Stanley said in a note, adding that vacancies have seesawed by magnitudes of hundreds of thousands in recent months. “Pay attention to the trend but do not get overly excited at the month-to-month wiggles.”

The number of vacancies per unemployed worker, a ratio the Fed watches closely, held at 1.1, in line with levels seen in the strong labour market of 2019. At its peak in 2022, the ratio was two to one.

One bright spot in the report was hiring, which picked up to the fastest rate since May — consistent with September’s blowout jobs report. But it’s largely been on a downward trend from its latest peak in 2021.

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