US JOLTS data reflect declining labor market slack, steady worker confidence

Total job openings rose to 5.526mn in September (previous: 5.377mn) according to the US Job Openings and Labor Turnover Survey (JOLTS) released this morning. The increase in total labor demand was led by service sector industries, including trade, transportation, and utilities (+75k); professional and business services (+126k); and education and health services (+52k). Job openings for manufacturing (-13k) and construction (-14k) declined modestly on the month. Offsetting this indication of sluggish labor demand for goods-producing industries, manufacturing hires picked up to the highest level since October 2014, at 283k (previous: 267k).

"The uptick in hiring was driven by durable goods manufacturing, which we suspect reflects the strength seen lately in the motor vehicle industry. In addition, the quits rate for durable goods manufacturing rose two-tenths, to 1.2%, indicating that workers in this sector are feeling better about their future employment prospects. On balance, these positive indications for manufacturing pose modest upside risk to our baseline expectation of tepid growth for the sector', says Barclays.

For total labor market, the quits rate was unchanged at 1.9% for the sixth consecutive month. This, along with a steady unemployment insurance utilization rate, suggests that worker confidence held steady in September despite a slower pace of employment growth during the month. Labor market slack continued to diminish as well. The number of unemployed job seekers per job opening fell to the lowest level since 2007, at 1.4. Declining labor market slack, steady worker confidence, and continued employment gains will likely bolster the Fed's confidence in the economic outlook and ultimately lead to an initial rate hike at the December FOMC meeting.