It Got Harder To Find a Job in August

Lowering job openings is just what the Fed’s rate hikes are meant to accomplish

A person looks across a table.

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If you’re on the job hunt, you might find that listings are a little less plentiful than they used to be.

The number of job openings fell by more than one million in August to 10.1 million, the U.S. Bureau of Labor Statistics said Tuesday. That’s still far more than the 6 million people who were unemployed that month, but a significant downswing from the record 11.9 million openings in March—and a sign that the job market is losing steam.

Not coincidentally, March was when the Federal Reserve began its campaign of interest rate hikes intended to cool the economy and slow today’s rampant inflation. Fed Chair Jerome Powell has said the central bank is eager to rebalance supply and demand throughout the economy, even if that means reducing demand by pressuring household budgets. Fewer job openings means workers have slightly less leverage to demand raises and move to higher-paying jobs. The Fed’s interest rate hikes have made it harder to borrow money, which makes it harder for businesses to expand and people to make expensive purchases such as cars and houses.

“This is still a jobseeker’s labor market, it's just less so than it was a few months ago,” said Nick Bunker, head of economic research at the Hiring Lab of job hunting site “The labor market was white hot, and now it's just barely like 90 degrees. There's still a large number of job openings.”

However, the job market’s trajectory is now distinctly downward.

The decline in the number of job openings means that any given unemployed worker will find fewer opportunities than earlier this year, although still far more than the pre-pandemic days. The ratio of vacancies to jobless workers fell to 1.7 in August, down from 2 in July.

Officials at the Federal Reserve will likely take this as a positive sign that their inflation-fighting campaign is working, Bunker said.

Job Openings Decrease, but Layoffs Remain Low for Now

Workers, of course, might not be so jubilant about this development. However, the good news for job hunters is that, as of August, the job market was still favorable for them, and layoffs were hovering near historic lows. Also, economists said the decrease in openings increases the chances that the Federal Reserve will be able to control inflation without causing a recession and mass layoffs—the so-called “soft landing” scenario.

The diminished number of job openings reflects a reduced demand for labor, Bunker said. Whether that will continue to only take the form of fewer job openings or whether companies will begin layoffs in earnest remains to be seen.

“I think that's the trillion-dollar question right there,” Bunker said. “At least so far, things are trending in that soft-landing direction. But we also probably haven't seen the full effects of the tightening of monetary policy.”

The Fed expects that its interest rate hikes will cause the unemployment rate to rise to 4.4% in June next year, up from its current near-historic low of 3.7%.

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  1. U.S. Bureau of Labor Statistics. “Job Openings and Labor Turnover Summary.”

  2. Federal Reserve Bank of St. Louis. “Job Openings: Total Nonfarm.”

  3. Federal Reserve Bank of St. Louis. “Unemployment Level.”

  4. Board of Governors of the Federal Reserve System. “Transcript of Chair Powell’s Press Conference

    September 21, 2022.” Page 16.

  5. U.S. Bureau of Labor Statistics. “Economic News Release.”

  6. Board of Governors of the Federal Reserve System. “Summary of Economic Projections (September 21, 2022).” Page 2.

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