Unanticipated Decline in Job Openings; Quits at Lowest in 8 Years

Unexpected Drop in Job Openings

Just a month ago, when Kamala Harris was still in the race for the presidency, it was reported that the number of job openings had risen from a revised 7.7 million to 8.040 million in August, according to the Bureau of Labor Statistics. This was not only significantly higher than expectations but also exceeded the highest forecast from Wall Street. However, the scenario has changed dramatically with the BLS reporting a plunge in job openings from over 8 million to just 7.4 million in September, the lowest since early 2021. This represents a significant deviation from expectations.

Staggering Miss to Expectations

The drop in job openings was a massive 418K. The situation would have been worse had the BLS not revised the August print sharply lower, from 8.04 million to 7.861 million. The number of job openings decreased in health care and social assistance (-178,000); state and local government, excluding education (-79,000); and federal government (-28,000) but increased in finance and insurance (+85,000).

Construction Job Openings Tumble

After the surge in construction job openings last month, the BLS made an adjustment, and construction job openings fell by 40K to 288K, nearing the post-covid lows. The number of "construction jobs" is expected to decline significantly once the new administration takes office.

Job Openings vs Unemployed Workers

In September, the number of job openings was 690K more than the number of unemployed workers, slightly down from the previous month and not too far from inverting once again, similar to what happened during the covid crash.

Rebound in Hires, Drop in Quits

While the job openings collapse was a shocking return to the contraction observed for much of 2024, the number of hires rebounded by 123K to 5.558 million, just above the post-covid lows. However, the number of quits in September tumbled to 3.071 million, a new post-covid low and down by 107K from August. This indicates that the true state of the job market is about as "strong" as it was 8 years ago, when the US GDP was about $10 trillion lower.

Real Number of Job Openings

Despite what the "data" shows, it's important to remember that it's all just estimated. The BLS itself admits that while the response rate to most of its various labor surveys has collapsed in recent years, nothing is as bad as the JOLTS report where the actual response rate remains near a record low 33%. This suggests that more than two thirds, or 70% of the final number of job openings, is made up.

Bottom Line

The unexpected drop in job openings and the plunge in quits to an 8-year low paints a concerning picture of the job market. It raises questions about the accuracy of the data and the true state of employment in the country. What are your thoughts on this? Do you think the job market is as strong as it's being portrayed? Share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.