After two consecutive months of record high job openings, today's August JOLTS report  - Janet Yellen's favorite labor market indicator - showed a modest pullback across most categories, with the total number of job openings falling in august from 6.140MM to 6.082MM, below the 6.125MM consensus estimate, resulting in an unchanged Oct. job opening rate of 4%. Still, after nearly two years of being rangebound between 5.5 and 6 million, the latest job openings number confirms that there may be a "breakout" about what was the previous resistance level, as increasingly more jobs remain unfilled in a labor market where skill shortages and labor imbalances are becoming structural.

The number of total job openings declined modestly by 58,000, increasing in health care and social assistance (+71,000) and in durable goods manufacturing (+31,000), while job openings decreased in other services (-95,000), educational services (-51,000), and non-durable goods manufacturing (-48,000). The number of job openings increased in the Midwest region. Now if only employers could find potential employees that can pass their drug test...

The rest of the report was just as subdued, with the pace of hiring reversing last month's increase, declining by 91,000 to 5.430 million...

... pressuring the pace of hiring lower from 3.8% in July to 3.7% in August. According to the BLS, the number of hires was little changed for total private and for government. The number of hires was little changed in all industries. Hires decreased in the Northeast region.

On an annual basis, the pace of hiring slowed down modestly, declining to 2.7% Y/Y in August, down from 3.6% in July.

The other closely watched category, the level of quits - which indicates workers' confidence they can leverage their existing skills and find a better paying job - also reversed last month's increase, and in  declined from 3.194MM to 3.124MM, suggesting workers are feeling less confident about their job skills than the previous month. The number of quits was little changed for total private and for government. Quits decreased in information (-14,000) and mining and logging (-6,000). In the regions, the number of quits increased in the West but decreased in the South.

And with a total 5.2 million separations (a 3.6% rate), this means that there were 1.7 million layoffs and discharges in August, little changed from July. The layoffs and discharges rate was 1.2 percent in August. The number of layoffs and discharges was little changed for total private and for government. The layoffs and discharges level decreased in state and local government education (-11,000) and federal government (-4,000). The number of layoffs and discharges was little changed in all four regions.

Finally, and perhaps most notably, the Beveridge Curve (job openings rate vs unemployment rate), appears to be gradually normalizing after a nearly decade-long "drift" from its conventional pattern. From the start of the most recent recession in December 2007 through the end of 2009, the series trended lower and further to the right as the job openings rate declined and the unemployment rate rose. In August 2017, the unemployment rate was 4.4 percent and the job openings rate was 4.0 percent.