With the announcements that job openings have fallen to their lowest level in three years and that gross domestic product rose at a 2.8 percent annual rate, economists remain divided on what it all means as they await a potentially subdued jobs report this Friday.
“This is an extremely noisy period in data being whipped around,” Bankrate.com senior economic analyst Mark Hamrick told The Epoch Times. “The JOLTS report is just another data point at a time when we’ve been through several months of concerns.”
The September Job Openings and Labor Turnover Survey (JOLTS) report showed a decline of 418,000 jobs to 7.443 million for the last day of September, compared with August’s 7.86 million openings. It also revealed that the job openings rate, at 4.5 percent, had barely changed since the preceding month, with the most significant decreases in job openings occurring in health care and social assistance (a loss of 178,000), state and local government (a loss of 79,000), and the federal government (a loss of 79,000). Jobs increased in a few sectors, including finance and insurance (28,000).
“The broad trend is the labor market is continuing to cool and slacken,” Julia Pollak, chief economist at ZipRecruiter, told The Epoch Times. “I think this report is a continuation of a labor market starting to cool and slow.”
“This data is a little foreshadowing of the holiday hiring. It’s flat for September and the lowest since 2011 in retail. It could also affect Friday’s jobs report,“ she said. ”That’s not necessarily to paint a bad picture. The consumer shift to eCommerce has changed a lot of things in various industries. The retail job numbers may be just one effect of this.”
Friday’s jobs report, coming just four days before the presidential election, will be looked at skeptically by some in light of a month of labor turmoil caused by natural disasters and strikes.
“I’m expecting that there’s a high risk of us being surprised one way or another because of the potential impact of things like the Boeing strike and the impacts of [hurricanes] Milton and Helene,” Hamrick said.
“I would say the consensus is something around 125,000 jobs added, down by half from September. But with so many unique factors affecting the creation of the numbers, we need to be prepared to give it the usual thorough inspection and take it with a grain of salt and realize some of this data may be foggy for a while.”
Meanwhile, there is hope that the Federal Reserve, in its two meetings scheduled for two days after the election and again on Dec. 18, will use current economic data to decide to lower interest rates twice. However, there is some skepticism that lowering interest rates would have an immediate effect on hiring.
“On the way up, interest rates had an adverse effect on investment and the labor market. And on the way down, they won’t cause the labor market to suddenly be invigorated all at once and lead to different investments at different times,” Pollak said.
But Hamrick said he’s content just knowing rate drops are coming in an economy that has seemingly been resilient to inflationary pressures.
“As far as the Fed is concerned, I don’t think there are any reasons they won’t make cuts in November and December because rates continue to be restrictive. If we do get even 25 basis point cuts in each month, from where we were in the summer, they would have removed 100 basis points from their benchmark rates,” he said.
“The GDP numbers are consistent with a U.S. economy more resilient and robust over time and consumer spending powered a big part of that increase. Real incomes have been rising for 18 months. If nothing else, consumers have adjusted to the high-price environment.”
