The job market's ‘game of musical chairs’ may be slowing — but workers still have power, say economists

cnbc.com:

There are signs the hot job market is cooling — but workers still have bargaining power for now, according to labor economists.

Job openings, a barometer of employers' demand for workers, saw a near-record monthly decline in August. Openings fell by 1.1 million to 10.1 million, according to U.S. Department of Labor data issued Tuesday — a monthly decrease eclipsed only by April 2020, in the early days of the pandemic, when they fell by roughly 1.2 million.

The Federal Reserve is raising borrowing costs for consumers and businesses to pump the brakes on the U.S. economy and reduce inflation. Central bank officials hope that a cooling labor market will translate to lower wage growth, which has been running at its highest pace in decades and contributes to inflation.

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Job openings started to surge in early 2021 as Covid-19 vaccines rolled out and the economy began to reopen more broadly. Workers were able to quit their jobs for other opportunities amid ample job postings and as employers competed for talent by raising pay. That job-hopping trend came to be known as the Great Resignation.

«I think this is exactly what the Fed wants to see,» Julia Pollak, chief economist at ZipRecruiter, said of the reduction in job openings. «The tension leading to this cutthroat game of musical chairs [among workers], they want that eased.

»And there are finally signs this is happening."

There were 1.7 job openings per unemployed worker in August, down from nearly 2 openings per unemployed in July. Fed chairman Jerome Powell