WASHINGTON — The number of US jobs rose unexpectedly in August as the US labor market continued to show resilience.
The Labor Department reported on Tuesday that employers posted 8 million job vacancies in August, up from 7.7 million in July. Economists had expected openings to be virtually unchanged. Openings were up in construction and in state and local government.
The layoffs took place in August. But the number of Americans who quit their jobs — a sign of confidence in their job prospects — fell to the lowest level since August 2020 as the economy reeled from the Covid-19 lockdowns.
Job vacancies have fallen steadily since peaking at 12.2 million in March 2022, but are still above where they stood before the coronavirus pandemic hit the US economy in early 2020. As the economy roared back with unexpected strength from covid -19 shutdowns, companies scrambled to find enough workers to keep up with customer orders.
The overheated economy caused a burst of inflation, and the Federal Reserve responded by raising its benchmark interest rate 11 times in 2022 and 2023. Inflation has fallen — from a peak of 9.1% in June 2022 to 2.5% in August.
The economy proved surprisingly resilient to the Fed hikes, averting a widely predicted recession. But the labor market has gradually lost momentum. Hiring averaged just 116,000 net new jobs per month from June to August — the weakest three-month average since mid-2020.
When the Labor Department releases its September jobs report on Friday, it is expected to show that employers added 143,000 jobs last month and the unemployment rate remained at a low 4.2%, according to a survey of forecasters by data firm FactSet.
The Fed, pleased with progress against inflation and worried about a cooling labor market, last month cut its benchmark interest rate by a hefty half a percentage point, the central bank’s first and biggest rate cut since March 2020.
“Job openings produced a big gain, and while these numbers are volatile, it’s likely that employers are seeing falling interest rates stimulating the economy and may want to add staff,” said Robert Frick, economist at Navy Federal Credit Union.