A look at new enrollments in 401(k) retirement plans shows that hiring cooled to 1.3% in August, its slowest pace since June 2020, according to Vanguard data.
That’s below the government’s 3% Job Openings and Labor Turnover Survey (JOLTS) data for July. The 401(k) data was based on a 3-month average. It compares new enrollment versus existing employees at firms with over 250 employees.
After September’s first rate cut in four years, Federal Reserve Chair Jerome Powell on Monday said that the central bank wants to avoid further weakening in the labor market.
“New entrants to the labor force generally have a higher unemployment rate because it takes time for them to find a job,” said Vanguard’s labor economist Adam Schickling, about the hiring data. “This explains why the unemployment rate has risen over the past year even as job losses have not materially increased.”