WRAPUP 1-US job openings jump in September; layoffs lowest in 1-1/2 years

By Lucia Mutikani

WASHINGTON, Nov 3 (Reuters) - US job openings surged in September while layoffs fell to the lowest level in 1-1/2 years, supporting economists' views that the labor market remained on firmer footing despite tepid employment gains during that month.

The Labor Department's Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday also showed the largest number of resignations in nearly 3-1/2 years. There were 1.06 job openings for every unemployed person in September. This ratio was up from 1.02 in August.

Labor market resilience despite the uncertainty spawned by the US-Israeli war with Iran gave the Federal Reserve more scope to raise interest rates to deal with the inflation fallout from the conflict, now in its ninth month.

"For now, all signs point to a solid labor market, even if it is difficult for pockets of workers, namely those who are unemployed," said Matthew Martin, senior US economist at Oxford Economics. "This will keep the Fed focused on the inflation side of its mandate. We expect officials to move at a gradual pace and deliver interest rate hikes at the upcoming December and March meetings."

Job openings, a measure of labor demand, rose by 333,000 to 7.523 million by the last day of September, the Labor Department's Bureau of Labor Statistics said. Data for August was revised slightly higher to show 7.190 million vacancies instead of the previously reported 7.079 million.

Economists polled by Reuters had forecast 7.100 million unfilled positions in September.

State and local government, excluding education, accounted for just under a third of the rise in job openings in September, with 104,000 vacancies. Unfilled jobs in the private sector increased by 236,000, led by the 106,000 vacancies in the professional and business services sector. Open positions in manufacturing rose 54,000, while vacancies in construction increased 36,000 amid an artificial intelligence buildout.

Unfilled positions in the trade, transportation and utilities sector increased by 45,000. But there were fewer vacancies in the financial activities industry, mostly finance and insurance, healthcare and social assistance as well as leisure and hospitality sectors.

Nearly all the job openings in September were in small businesses. Vacancies fell in establishments with 50 to 249 workers. The job openings rate rose to 4.5% from 4.3% in August.

LABOR MARKET STABLE

Economists view the labor market as continuing to be in a "low-hire, low-fire" state, and argue that strong profits as domestic demand remains resilient were keeping layoffs near historic lows. The protracted Middle East conflict is, however, making employers hesitant to boost hiring, they said.

Nonfarm payrolls increased by 29,000 jobs in September, attributed by economists to a calendar quirk. A Reuters survey of economists expects payrolls to have advanced by 65,000 in October. The unemployment rate is forecast to have been unchanged at 4.2%. The US central bank last Wednesday left its benchmark overnight interest rate within the 3.75%-4.00% range while acknowledging that inflation "remains elevated."

Hiring increased by 131,000 to 5.402 million in September. It was led by the accommodation and food services sector, which added 158,000 positions. There were notable increases in hiring in the construction and retail sectors.

But hiring declined in manufacturing, professional and business services, financial activities industries as well as federal, state and local government. Small and medium-sized companies accounted for all the hiring in September. Employers with 250 to 5,000 or more workers reported declines in hiring. The hires rate rose to 3.4% from 3.3% in August.

Layoffs and discharges decreased by 127,000 to 1.641 million, the lowest level since March 2025. The decline was nearly across the board, with healthcare and social assistance dominating. There were also fewer layoffs in the trade, transportation and utilities industry as well as the professional and business services sector.

But there was a notable increase in job losses in construction. Businesses with 10 to 49 employees reported a rise in layoffs. The layoffs rate fell to 1.0% from 1.1% in August.

More workers quit in September, which at face value would suggest confidence in the labor market and a rise in wages. The number of quits increased by 321,000, the most since May 2023, to 3.365 million. The level was the highest since March 2025.

Most of the resignations were in the accommodation and food services and construction industries. Some of the quits could be tied to an immigration crackdown. The National Association of Home Builders said last month more than a third of builders reported immigration enforcement activity in their market areas was "discouraging legal workers from reporting to work."

Nearly all the resignations in September were in small and medium-sized businesses. The quits rate, viewed by policymakers and economists ​as a measure of job ⁠market confidence, increased to 2.1% from 1.9% in August.

"There are once again more job openings than unemployed workers, suggesting some upward pressure on wages going into 2027," said Ben Ayers, senior economist at Nationwide. "We expect job growth to remain solid, but not strong, over the remaining months of 2026 as businesses juggle rising costs with resilient consumer demand and widespread AI investment."

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(Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci )

((Lucia.Mutikani@thomsonreuters.com))