Weekly Economic Review: August Job Openings Fall to 8-Month Low

Posted by Laine Smith on 10/14/16 12:35 PM

Topics: Economy

Reports of slowing in the job market reverberated this week as monthly job openings fell sharply in August, down 7.3 percent to 5.443 million, according to the Labor Department’s Job Openings and Labor Turnover Survey. This is the lowest number of job openings since December 2015. Hiring also slowed by 0.9 percent.

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Image courtesy of ddpavumba at FreeDigitalPhotos.net

The Labor Market Conditions Index, which is compiled by the Federal Reserve, also dropped to a level of minus 2.2 for September. This extends August descent of a revised minus 1.3.

The Federal Open Market Committee voted 7-3 in September to leave the federal funds rate as-is. The meeting minutes, released on Wednesday, gave insight as to why the committee was so unusually divided. Hawks argued that leaving rates unchanged for too long would possibly trigger higher inflation and the need for drastic rate increases in the future. Doves debated that holding off could help the unemployed get back into the work force, allowing for continued job growth in the future minus volatility in wages and inflation.

Retail sales in September were solid, increasing 0.6 percent month over month. Auto sales were a highlight of the report with a 1.1 percent increase, reversing August’s 0.3 percent descent.

This week in the economy:

  • The 30-year fixed-rate mortgage averaged 3.47 percent in the October 10 week according to Freddie Mac. This is an increase of 5 basis points from the week prior.
  • The October 7 week purchase application index of MBA Mortgage Applications slowed again, dropping 3 percent. The refinance index fell by 8 percent to the lowest level since June.
  • Initial Jobless Claims fell to the low end of expectations in the October 8 week at 246,000. The 4-week average is down roughly 10,000 from a month ago.
  • The Bloomberg Consumer Comfort Index rallied in the October 9 week after falling into the 41 range in September. The index was up 7-tenths to 42.1.
  • Consumer Sentiment fell drastically for October, falling 3.3 points to 87.9. This is the weakest reading since September 2015. The expectations component was down more than 6 points.

What’s on economic calendar for the week of October 17, 2016:

  • Tuesday – Consumer Price Index, Housing Market Index
  • Wednesday – MBA Mortgage Applications, Housing Starts
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index, Existing Home Sales
  • Friday – Retail Sales, Consumer Sentiment

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