U.S. job openings fell in July, declining to an early 2021 level. A few weeks ahead of the next Federal Open Market Committee meeting, this latest data release offers fresh evidence that the labor market is cooling.
The number of job openings edged down to 8.8 million in July from 9.17 million in June, the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, or JOLTS, showed on Tuesday. It marked the sixth decline in the last seven months. In July, the number and rate of hires were little changed at 5.8 million and 3.7%, respectively. Also, vacancies fell for sixth time in the last seven months.
“The Fed is getting exactly what it wants; it wanted to attack the labor market, and finally, they’re getting closer to their goal,” said HousingWire’s Lead Analyst Logan Mohtashami.
The quits ratio, which measures voluntary job leavers as a share of total employment, decreased to 3.5 million with a rate little changed at 2.3% — this is its lowest since the start of 2021. In other words, Americans are less confident in their ability to find another job in the current market.
Job openings decreased in professional and business services, health care, social assistance and government. By contrast, job openings increased in information, transportation, warehousing and utilities.
The latest report confirms that the labor market is rebalancing, with improved supply and moderated demand. Consequently, wage growth has tempered. The Fed expects this trend to continue, said Jerome Powell last Friday at an economic policy symposium in Jackson Hole, Wyoming. However, the Fed Chairman remained cautious and if the labor market stopped easing, the Fed would have to provide a monetary policy response. Meanwhile, unemployment remains historically low.
“I believe they will feel a lot more comfortable with job openings around 7 million, but the quits ratio is back to pre-pandemic levels, so their attack on the labor supply is working,” added Mohtashami.