Job openings slumped to their lowest level in three and a half years in July, the Labor Department reported Wednesday in another sign of slack in the labor market.
The department’s closely watched Job Openings and Labor Turnover Survey showed that available positions fell to 7.67 million on the month, off 237,000 from June’s downwardly revised number and the lowest level since January 2021.
Economists surveyed by Dow Jones had been looking for 8.1 million.
With the decline, it brought the ratio of job openings per available worker down to less than 1.1, about half where it was from its peak of more than 2 to 1 in early 2022.
The data likely provides further ammunition to Federal Reserve officials who are widely expected to begin lowering interest rates when they meet for their next policy meeting on Sept. 17-18. Fed officials watch the JOLTS report closely as an indicator of labor market strength.
“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. “Nobody, and certainly not policymakers at the Federal Reserve, should want the labor market to get any cooler at this point.”
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 labor force up to 3.4%. However, hires rose as well, up 273,000 on the month, putting the rate at 3.5% or 0.2 percentage point better than June.
The report comes two days ahead of the pivotal August nonfarm payrolls count that the Labor Department will release Friday. The report is expected to show an increase of 161,000 and a tick down in the unemployment rate to 4.2%.