The U.S. job market is still historically healthy, but less healthy than it’s been for much of the last several years. Fewer small firms have positions available, according to the latest monthly survey from the National Federation of Independent Business, due out later today. NFIB Chief Economist William Dunkelberg reports:
In NFIB’s September survey, 34 percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down 6 points from August and the lowest reading since January 2021. Thirty percent have openings for skilled workers (down 6 points) and 14 percent have openings for unskilled labor (down 1 point). Overall, the job market seems to be softening.
The NFIB economist adds:
Job openings were the highest in the construction, transportation, and
manufacturing sectors, and the lowest in the agriculture and finance sectors.
However, job openings in construction were down 7 points from last month with 53 percent having a job opening they can’t fill. Overall, the percent of firms with one or more job openings they can’t fill remains at exceptionally high levels. This indicates continued upward pressure on compensation and, ultimately, on inflation. As labor markets soften overall, small firms may find more success in filling open positions.
Less competition for talent from large employers may allow smaller firms to finally fill their open positions. This should also mean less pressure on small companies to raise wages to attract workers. But for now, the story on compensation is a bit muddled. Mr. Dunkelberg notes:
Seasonally adjusted, a net 32 percent reported raising compensation, down 1 point from August and the lowest reading since April 2021. A net 23 percent (seasonally adjusted) plan to raise compensation in the next three months, up 3 points from August. Labor costs appear to still be under pressure.
And by some measures the outlook for future hiring is looking a little brighter, according to NFIB:
A seasonally adjusted net 15 percent of owners plan to create new jobs in the next three months, up 2 points from August. Job creation plans are below the levels seen the last time the economy experienced solid growth but are in solid territory historically.
Generally a tight labor market seems to be be gradually loosening. Mr. Dunkelberg reports:
The percent of small business owners reporting labor quality as their top small
business operating problem fell 4 points from August to 17 percent. Labor cost
reported as the single most important problem for business owners was
unchanged at 9 percent, 4 points below the highest reading of 13 percent reached in December 2021.
There are still plenty of job openings in America for those who want to work. Today seems like a good time to look given signs that there may be fewer jobs tomorrow.
Source: Wall Street Journal
