Job openings declined for a third month, to 10.7 million from 11.3 million in May, the Bureau of Labor Statistics (BLS) said Tuesday. The decreased number of openings—fewer than the 11.1 million economists had expected—means there are now 1.8 jobs for every unemployed worker, compared to 1.9 in May. The number of workers quitting—an indication of how confident people are of finding new jobs—fell slightly to 4.2 million from 4.3 million but stayed relatively high by historic standards. However, layoffs also fell a tad from 1.4 million to 1.3 million, staying near all-time lows. The scarcity of layoffs, plus the fact that job openings and the number of workers walking away from their jobs remain near record highs in data going back to 2000, indicate that labor may still have the upper hand over employers. However, the sliding number of openings suggest that the tables may be turning as rampant inflation, the Federal Reserve’s efforts to combat it by raising its benchmark interest rate, and fears of a recession may begin to discourage companies from hiring, economists said. “The cooldown in the job market is underway,” Daniel Zhao, lead economist at job website Glassdoor, posted on Twitter. “Openings are still well above pre-pandemic levels, but the slowdown is very clearly affecting the job market now.”
If Job Market Gets Shaky, The Fed’s Inflation Fight Gets Complicated
In many ways, the strength of the labor market can serve as a proxy for the strength of the U.S. economy, and today’s job openings report along with Friday’s monthly jobs report from the BLS could also have key implications for the Federal Reserve’s next policy moves. Officials have said they will consider this and other reports on jobs and hiring this week as they decide whether and how much to hike interest rates again when the Fed’s policymaking committee next meets in September. While raising interest rates further could help eventually bring inflation down, it will also make borrowing more expensive, which would slow down economic activity and increase the likelihood that we might tip into a recession. The Fed has been aggressive in its campaign in the last few months, having made two of the biggest rate hikes in decades this summer, but economists say the Fed might scale back if it looks like tightening policy is slowing the economy so much that it’s causing mass layoffs and risking a recession. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
