Fewer job openings in 32 states.
August 16, 2023
Job openings continued to show signs of cooling in June with 32 states reporting fewer openings. Midwestern states like Illinois and Iowa listed fewer job openings. This suggests businesses in the region are slowing. Conversely, larger states including California and New Jersey rebounded after a dip in openings the previous month.
The nation as a whole saw a dip in hiring, as reflected in the nonfarm payroll reports; the number of new jobs added in June was the lowest since early 2021.
While the overall labor demand decreased, so did the number of unemployed individuals. That left the national ratio of job openings to unemployed job seekers steady at last month's level of 1.6. A total of 38 states, along with the District of Columbia, reported ratios equal to or above the national average. New Hampshire topped the list with a ratio of 3.3, meaning there were more than three job openings for every unemployed individual in the state. North Dakota, South Dakota, Maryland and Nebraska also reported ratios of 3 or above. Meanwhile, Washington state, which reported significant layoffs in the tech sector earlier in the year, had the nation's lowest ratio at 1.1. However, every state maintained a ratio above the equilibrium of 1.0, indicating persistent labor demand across the country.
Nationally, layoffs decreased in June, led by significant reductions in Georgia and Mississippi, which had also posted layoffs the previous month. With the Screen Actors Guild commencing strikes in July, industries associated with film studios are expected to be adversely affected. States with significant involvement in film production include California, New York, Georgia and Illinois.
The national quit rate also decreased as 19 states recorded fewer quits in June. The decline was widespread, with states like New York and those in the South, including Tennessee, Georgia and North Carolina, experiencing notable drops. That downward trend is another indicator of a cooling labor market, happening in a region that has been an engine for job growth.
As demand for workers in the South slows, fewer individuals are likely to change jobs. The decrease in quits has led to slower wage growth for both those switching jobs and those retaining their positions during June and July.
As inflation slows, cooling wage growth could influence the Federal Reserve.
Labor demand is showing signs of cooling this summer. Even though total demand for labor continues to outstrip supply, data from job posting sites and payroll reports suggest that wage growth has slowed considerably compared to the previous year. As inflation slows, cooling wage growth could influence the Federal Reserve to leave interest rates at their present level.