US job openings fell significantly in July, reaching their lowest level in more than three years, according to data released by the Labor Department on Wednesday.
The number of available positions decreased to 7.67 million, down from 7.91 million in June. This marks the lowest count since January 2021 and is below economists’ expectations of 8.1 million.
The decline in job openings continues a trend observed over recent months, with the ratio of job openings to available workers dropping to less than 1.1. This is a notable decrease from the peak ratio of over 2:1 seen in early 2022. The data points to a cooling labor market as the economic conditions continue to evolve.
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) reveals that layoffs increased to 1.76 million in July, a rise of 202,000 from the previous month. Total separations also jumped by 336,000, elevating the separations rate to 3.4% of the labor force. Despite these increases, hiring activity saw a rise, with 5.52 million hires recorded, compared to 5.25 million in June.
The report arrives ahead of the August nonfarm payrolls data, which is expected to show an increase of 161,000 jobs and a slight decrease in the unemployment rate to 4.2%. This data is crucial as the Federal Reserve prepares for its next policy meeting on September 17-18, where a rate cut is anticipated.
“The labor market is no longer cooling down to its pre-pandemic temperature; it’s dropped past it,” said Nick Bunker, head of economic research at the Indeed Hiring Lab.
He stated that a further cooling of the labor market is not desirable for economic stability.
The decrease in job openings reflects a broader trend of reduced hiring and increased layoffs. However, the rate of layoffs remains relatively low compared to historical averages. The data indicates that while there is a shift towards a more balanced labor market, the overall job landscape remains in flux.
CNN, CNBC and Market Watch contributed to this report.
