The August Job Openings and Labor Turnover Survey (JOLTS) confirms the source of the recent slowdown in the US labor market. The tepid employment growth we’ve seen in recent months has been at least partially the result of a decline in hiring appetite. The question is whether this is a temporary speed bump due to a surge in COVID cases or if demand will continue to slacken in the months ahead.
Job openings fell in August for the first time this year. The drop in openings for the leisure and hospitality sector was notable. Employment growth has already slowed in recent months since the sector is especially sensitive to the pandemic. The decline here suggests that the rising case counts in August tempered employer demand for new hires. At the same time, the quits rate for leisure and hospitality jumped by over 20% in just one month.
The slowdown in August is noteworthy, but it’s not a total reversal of fortune. The job openings rate is at a level that would have been an all-time high if not for July’s numbers. And the quits rate is over 25% higher than its pre-pandemic level. Demand for workers remains strong and workers have plenty of options. This could be just a temporary set back for demand, but we’ll have to see what the future holds.