Job openings in the U.S. dropped to their lowest level in three and a half years this July, signaling a potential slowdown in the labor market. According to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), available positions fell to 7.67 million, down by 237,000 from June’s revised figures. This marks the lowest level of job openings since January 2021 and falls short of economists’ expectations, who had predicted 8.1 million openings for July.
US job openings fall as demand for workers weakens https://t.co/egD7vLNZQs
— WPMT FOX43 (@fox43) September 4, 2024
This decline has brought the ratio of job openings per available worker down to less than 1.1, a significant drop from its peak of more than 2 to 1 in early 2022. The current ratio indicates there are just slightly more than one job opening for every unemployed worker, suggesting that the labor market is becoming less tight.
The JOLTS data could influence the Federal Reserve’s upcoming policy decisions. The Federal Reserve closely monitors this report as an indicator of labor market conditions and strength. With job openings declining, there could be more pressure on the Fed to begin lowering interest rates during their next policy meeting scheduled for September 17-18.
Nick Bunker, head of economic research at the Indeed Hiring Lab, noted the sharp cooling of the labor market: “The labor market is no longer cooling down to its pre-pandemic temperature, it’s dropped past it. Nobody, and certainly not policymakers at the Federal Reserve, should want the labor market to get any cooler at this point.”
Fall is here and so is the start of a new month. Today I opened a long position on $EURUSD The price was building liquidity almost all day so the distribution happened right around the JOLTS Job Openings release. Not a bad way to kick off the month. Lets keep it going#Forex pic.twitter.com/3A5KV4ybF8
— Primus (@primus_fxg) September 4, 2024
In addition to the decline in job openings, the report highlighted an increase in layoffs, which rose to 1.76 million, up by 202,000 from June. Total separations, which include layoffs, quits, and other separations, jumped by 336,000, pushing the separations rate up to 3.4% of the labor force. Despite these increases, hires also saw a boost, rising by 273,000 from the previous month and putting the hiring rate at 3.5%, slightly better than June’s rate.
The release of the JOLTS report comes just ahead of the much-anticipated August nonfarm payrolls report from the Labor Department, due out on Friday. Economists expect this report to show a modest increase of 161,000 jobs and a slight decrease in the unemployment rate to 4.2%.
Key Points:
i. Job openings in July fell to 7.67 million, the lowest level since January 2021, indicating a cooling labor market.
ii. The ratio of job openings per available worker has dropped to less than 1.1, down significantly from early 2022 levels.
iii. The decline in job openings could influence the Federal Reserve to consider lowering interest rates at their next meeting.
iv. Layoffs increased to 1.76 million in July, while hires also rose by 273,000.
v. The Labor Department’s August nonfarm payrolls report, expected Friday, will provide further insight into the labor market’s health.
Fallon Jacobson – Reprinted with permission of Whatfinger News
