Key Points

  • Job openings ticked up to 8 million in August, higher than expected.
  • Hiring and quitting continue to trend down.
  • Layoffs remain low by historical standards.

August’s JOLTS report represents the exact kind of data you’d want to see on the way to a soft landing and helps paint a brighter picture of a labor market that is finding its footing and leveling off at generally balanced, sustainable levels. Job openings rising back to the 8 million mark is an important sign and represents a level at which the labor market can continue to move forward without wholesale increases in unemployment. A sideways move in hiring is a good sign that things are stabilizing, while layoffs also remain low. JOLTS data can sometimes be noisy, and it’s important not to read too much into one month’s worth of data, but this is an encouraging report.

The monthly rise in job openings in August was the first such uptick since May and echoes the recent stabilization in labor demand observed in more timely data, including the Indeed Job Postings Index. The ratio of job openings to unemployed workers now stands at 1.1, roughly on par with pre-pandemic levels. But while that turnaround is promising, other data show continued weakening. The quits rate continues to trend down, suggesting that workers feel less confident in their ability to switch jobs and quickly find a new one. And the number of hires was revised downward for July, indicating weaker hiring than previously thought. On the path to a soft landing, you would also want to see hiring and quits start moving sideways and eventually pick back up. However, layoffs do remain low, a promising sign that businesses are not feeling the pressure to reduce headcount. 

Looking ahead, if the labor market can continue to print reports similar to August’s JOLTS data, it is likely to remain in a good place. After several years of a wild run-up in labor demand, followed by a steady decline over the past two years, leveling off at or near current levels is exactly what we should expect to see as the market finds a better balance between labor supply and demand. Federal Reserve policymakers have stated that they want to keep the labor market on its current path, and will make any future rate decisions with these conditions in mind, though any future rate cuts will take time to work their way through the market.