Is the Labor Market Starting to Run out of Steam?
October 10, 2019
The job market is currently very strong. Job growth is continuing at a sizable pace and unemployment is at historic lows. There are, however, troubling early signs that this labor boom could be coming to an end.
There were 7.1 million job openings in the U.S. at the end of August. There were enough open jobs to hire every unemployed person in the country. While this is an impressive number, it was 4.4 percent lower than in the same month last year, and marks the third consecutive month that it has declined. Despite the opening, hiring has stalled. being lower in August lower than a year earlier. Hiring has also slowed, with the total number of hires lower in August than a year earlier.
The Economic Research Cycle Institute’s leading economic index, which tracks signs of the direction of the labor market, has plummeted recently, falling to levels not seen since the Great Recession. This, coupled with the slowdown in hiring and openings, suggests that the slowdown of the broader economy may be beginning to impact the labor market, which is cause for concern. The Labor Department’s data only goes back to 2000, but job opening declined prior to both of the major recessions since then.