In July, job openings dropped to their lowest level in 3½ years, according to the Labor Department’s Job Openings and Labor Turnover Survey. The number of available positions fell to 7.67 million, a decrease of 237,000 from the previous month and the lowest since January 2021. This decrease has brought the ratio of job openings to available workers down to less than 1.1. These numbers are likely to prompt the Federal Reserve to lower interest rates at their upcoming meeting in September.
While job openings declined, layoffs increased to 1.76 million, with total separations also jumping. However, hires also rose, indicating that the labor market is not deteriorating rapidly. The professional and business services sector saw the biggest increase in job openings, while other sectors like private education and health services, trade, transportation, and utilities, and government experienced declines.
Despite the concerns about the economy slowing down, the labor market does not show signs of cracking. Demand for workers is softening relative to the supply, and this trend is expected to continue under restrictive policies. The report comes ahead of the August nonfarm payrolls count, which is expected to show an increase of 161,000 jobs and a decrease in the unemployment rate to 4.2%. This data suggests a slightly weakening labor market but not a rapid deterioration.
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