Job openings shrink
The number of open positions compared to available workers, which previously was significantly imbalanced with far more jobs than workers, recently leveled off. At the end of July, according to the U.S. Bureau of Labor Statistics, there were 7.7 million job openings in the U.S., compared to 7.1 million unemployed persons. The so-called “Worker Demand Gap,” or number of job openings minus the number of unemployed workers, is at its lowest level in more than three years.3
One measure economists watch to forecast potential changes in labor market trends is the weekly new jobless claims report. In the most recent report, initial jobless claims stood at 227,000 for the week ending August 31.4 This is down from a 2024 high of 249,000 jobless claims at the end of July. “If you look at long-term history, sub-300,000 initial weekly jobless claims is considered a fairly healthy level for the economy,” says Haworth. “Investors now closely watch this weekly data point to try to get an early read on labor market trends.”
Markets also track the labor force participation rate, considered a key barometer of the broader economy’s health. This number hasn’t changed much over the past year, and in August stood at 62.7%.1 “Improving labor participation is one way to address tightness in the labor market that’s propping up wage gains,” says Matt Schoeppner, a senior economist at U.S. Bank.