Workers are becoming increasingly wary of searching for new jobs amid a slowing labor market.

New data from the Bureau of Labor Statistics released Tuesday showed that the quits rate, a sign of confidence among workers, ticked down to 1.9% in August from July's 2%, marking the slowest pace since June 2020. Meanwhile, the Job Openings and Labor Turnover Survey (JOLTS) showed 5.31 million hires were made during the month, down from 5.41 million in July. The hiring rate hit 3.3% in August, down from 3.4% in July. Excluding the pandemic, the hiring rate was at its lowest level since 2013 in August.

"The quits rate fell to the lowest since the pandemic, and the decline is consistent with other data showing workers view the labor market less favorably," Nancy Vanden Houten, lead economist at Oxford Economics, wrote in a note to clients on Tuesday.

The report did provide some mixed signals as job openings increased more than expected in August, underscoring how the labor market is cooling but not rapidly slowing. There were 8.04 million jobs open at the end of August, an increase from the 7.71 million seen in July. Economists surveyed by Bloomberg had expected the report to show job openings ticked up slightly to 7.67 million in August.

Vanden Houten reasoned the largely soft JOLTS report tilts the risk toward the Fed cutting interest rates by 50 basis points at its November meeting amid a slowing economy, but it doesn't ensure a larger cut is warranted just yet.

The release comes less than two weeks after the Federal Reserve cut interest rates for the first time in more than four years. Fed Chair Jerome Powell has said the US economy is "in solid shape," and the Fed is reducing rates to ensure it stays that way.

"[The economy is] growing at a solid pace," Powell said. "Inflation is coming down. The labor market is in a strong place. We want to keep it there. That's what we're doing [by cutting interest rates]."

More updates on the health of the labor market are expected later this week, headlined by the release of the September jobs report on Friday. According to Bloomberg data, economists expect the report to show that 130,000 nonfarm payroll jobs were added to the US economy, with unemployment holding steady at 4.2%. In August, the US economy added 142,000 jobs, while the unemployment rate fell to 4.2%.

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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