US job openings fell to 7.079 million in August, the fifth consecutive monthly decline and the lowest reading since March, according to the Bureau of Labor Statistics (BLS) Job Openings and Labor Turnover Survey (JOLTS) released on September 29. The figure came in well below the 7.23 million consensus forecast and represented a drop of 256,000 from July's upwardly revised 7.335 million. On the same day, the Conference Board Consumer Confidence Index plunged 6.7 points to 81.9 in September from a downwardly revised 88.6 in August, the lowest level since 2014.
The deterioration in job openings was broad-based. Professional and business services led the decline with 119,000 fewer openings, followed by health care and social assistance at 115,000, manufacturing at 54,000, and construction at 48,000. Geographically, the West recorded the steepest drop at 243,000. The openings rate slipped to 4.3 percent from 4.4 percent in July. Hires edged up slightly to 5.19 million, lifting the hires rate to 3.3 percent, while total separations held relatively steady at 5.07 million. Layoffs fell to 1.6 million, suggesting employers remain reluctant to shed workers even as they pull back on new hiring.
Consumer sentiment painted a similarly downbeat picture. The Conference Board's Present Situation Index dropped 7.9 points to 109.3, while the Expectations Index slipped further below the 80 threshold that economists view as a recession warning signal, marking the second consecutive month below that level. Respondents cited growing concerns about rising prices and weakening job prospects, according to the Conference Board release.
The soft data arrives at a critical juncture for Federal Reserve policy. The central bank raised rates by 25 basis points to a target range of 3.75 percent to 4.00 percent at its September 16 meeting in a unanimous vote, citing persistent inflation pressures. Markets had been pricing in a 64 percent probability of another 25 basis point hike at the October 28 meeting ahead of the data releases. According to CME FedWatch, the October hike probability stood at approximately 71 percent on September 29, with expectations for at least one more increase before year-end. The August Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, is due on September 30, with consensus expecting core PCE at 3.40 percent year-over-year.
The juxtaposition of a cooling labor market and stubbornly elevated inflation leaves the Fed in a familiar bind. The September dot plot indicated one additional hike this year, and Friday's jobs report will provide further clarity on whether the labor market softening is severe enough to alter the rate path. For now, the data suggests the Fed may need to look past weakening demand signals in favor of its inflation-fighting mandate. The 10-year Treasury yield rose to 5.24 percent on September 29, reflecting the tension between slowing growth and persistent price pressures.
What the JOLTS data does not show is a labor market in free fall. Openings have retreated from earlier highs, hiring has plateaued, and layoffs remain subdued. The picture is one of gradual cooling, not collapse. Whether this is enough to dissuade the Fed from its hawkish stance hinges on Wednesday's PCE print and how policymakers weigh the balance between employment softness and inflation persistence. For markets, the takeaway is that the October rate decision remains very much in play, with the data flow in the coming days likely to be the deciding factor.
Sources
- Bureau of Labor Statistics, Job Openings and Labor Turnover Survey, August 2026 (released September 29, 2026): bls.gov
- Conference Board, Consumer Confidence Index, September 2026 (released September 29, 2026): prnewswire.com
- Trading Economics, United States Job Openings: tradingeconomics.com
- CME FedWatch Tool, October 2026 meeting probabilities: cmegroup.com
