United States employers got rid of more than a million job vacancies in August 2022, according to data from the Job Openings and Labor Turnover Survey – and experts are afraid that this could be just another sign of impending recession.
Job vacancies are a measure of labor demand, according to the U.S. Labor Department, and current numbers stand at about 10 million open roles. This recent slashing of job openings is one of the largest one-month decreases in twenty years, according to an analysis by the Financial Times, and it could be a further sign that the economy is slowing. Voluntary quit rates have also been trending down recently but are still slightly above pre-pandemic levels. The ratio of job vacancies to unemployed, the Times adds, is 1.7, meaning there are 1.7 jobs for every eligible worker – the same rate that it’s been for the past six months.
While a decrease in job vacancies might be a perilous warning for economists, it’s actually a blessing for the Federal Reserve, as it actively provides the economic relief they were desperately seeking by raising interest rates. As the economy becomes more restrained, policymakers at the Fed believe that balance can be achieved and job losses will not occur en masse.
However, Wall Street economists believe that a recession is unavoidable and that the unemployment rate will shoot up as inflation begins to take its toll. While the unemployment rate is still at a five-decade low and the consumer outlook on the economy is generally positive, experts are waiting for the other shoe to drop as they watch the housing market begin to decelerate.
“No one knows whether this process will lead to a recession or if so, how significant that recession would be,” said Fed Chair Jerome Powell after the September rate increase decision was announced.