
Lower quitting rates are seen as a sign that employees feel less certain about the job market and that they’re more interested in job security than a new job. Now, Jeffry Bartash reports at MarketWatch that “Workers are quitting at the slowest pace since the pandemic as hiring dries up and jobs become harder to find, reflecting a cooldown in what had once been a red-hot U.S. labor market.” This is another reason for the Fed to cut rates. I’m not on board with the rate cuts. I like rates that savers can sink their teeth into. Bartash continues:
The number of workers who quit jobs in August fell to 3.1 million from 3.2 million in the prior month to mark the lowest level in four years, the government reported Tuesday.
What’s more, the percentage of workers quitting slipped to just 1.9% to put it well below prepandemic levels.
The rate at which companies hire, meanwhile, dipped to 3.3%. That’s the lowest level in 11 years if the pandemic is set aside.
The big slowdown in hiring helps explain why fewer workers are quitting. Workers are apt to stay in their current job when it becomes harder to get another one.
Weaker hiring and fewer people quitting overshadowed the first increase in U.S. job openings in three months.
Openings rose to 8.0 million in August from a three-and-half year low of 7.7 million in July, the Labor Department said. Still, new openings have fallen by one-third from a record 12.2 million in 2022.
The slowdown in hiring and rising unemployment have overtaken inflation as the Federal Reserve’s main worry as it lowers interest rates to try to keep the economy on solid ground. The central bank cut rates two weeks ago for the first time in four years.
Action Line: Rate cuts too soon or too fast could lead to an inflationary bonfire, and every data point is more fuel for the fire. Watch the 90-day T-Bill, Dick Young’s “North Star,” as the Fed destroys the return on safe short-term investments. When you want to talk about your portfolio in the face of Fed rate cuts, email me at ejsmith@yoursurvivalguy.com.