Hiring increases but shows signs of cooling

October 17, 2024

Total job openings in the United States grew to eight million in August from the 7.7 million in July. That is a positive sign for the labor market. It showed continued resiliency even as it has continued to cool from the heights in 2021-2022.

Job openings rose month-over-month in more states than in previous months. That occurred in different regions across the country. Texas (+69,000), Minnesota (+54,000), New York (+51,000) and Georgia (+44,000) posted the largest increases. The largest declines were in Illinois (-42,000) and Florida (-36,000).

Real-time data from Indeed show that job postings in several large states are relatively flat over the past month. These include Texas, Georgia, New York and California. The difference is that the levels are above the pre-pandemic benchmark in the first two states; they are below-benchmark in the latter two states. The fact that postings are cooling but not collapsing bodes well for the months ahead.

The ratio of job openings to unemployed job seekers, a measure of balance in the labor market tracked closely by Federal Reserve officials, remained flat at 1.1. The ratio increased month-over-month in 27 states. That was driven by more job openings and declines in unemployment. The ratio in Minnesota increased to 1.9 from 1.4 and in Utah it increased to 2.1 from 1.4. Those are signs of a resurgent labor market.

Hiring and layoffs were basically flat in most states. Hiring decreased in some states, but the negative economic consequences were lessened as layoffs fell. The hiring rate dropped to 3.3% from 4.4% in Arizona; the layoff rate fell to 1.1%. from 1.7%. That has been the reality of the labor market in recent months. It is hard to find a new job, but there is more job security for those who are employed.

The quits rate remained flat in 41 states and Washington, D.C.; it declined in nine states. Data from ADP show that the wage premium for switching jobs declined to 6.6% in September from 7.3% in August. That is the lowest rate since April 2021. It points to the smaller monetary incentive to change jobs and aligns with the lower overall quit rate.

At the national level, the unemployment rate ticked down to 4.05% in September from 4.22% in August. At the state level, between August 2023 and August 2024, the unemployment rate increased in 40 states and the District of Columbia; it decreased in eight states and stayed flat in three others.