In a further sign that the U.S. labour market is cooling, job openings in July slumped to a more than three-year low.
The U.S. Labor Department reported that the so-called JOLTS data (Job Openings and Labour Turnover Survey) showed available positions fell to 7.67 million in July, a decrease of 237,000 from June’s downwardly revised number and the lowest level since January 2021. Economists had been expecting 8.1 million.
With the decline, the ratio of job openings per available worker dropped to less than 1.1, about half of its peak of more than 2 to 1 in early 2022.
The data provides an additional reason for the Fed to consider cutting its key rate at its meeting the week after next.
The Fed and other analysts closely monitor the JOLTS report as an indicator of labour market strength.
The release came just a few days before the August jobs data is set to be released on Friday.
While the job openings level declined, layoffs increased to 1.76 million, up 202,000 from June. Total separations jumped by 336,000, pushing the separations rate as a share of the labour force up to 3.4%. However, hires also rose, up 273,000 for the month, putting the hiring rate at 3.5%, which is 0.2 percentage points better than June.
The professional and business services sector showed the biggest increase in openings with 178,000. On the downside, private education and health services fell by 196,000, trade, transportation, and utilities declined by 157,000, and government, a leading source of job gains over the past few years, saw a reduction of 92,000.
While the report adds to concerns that the economy is slowing, it "does not suggest any rapid deterioration in the labour market," Krishna Guha, head of the Global Policy and Central Bank Strategy Team at Evercore ISI, said in a client note quoted by CNBC.
