Number of Job Openings Shrinks as US Labor Market Continues Cooling Off

The Department of Labor Building in Washington, on March 26, 2020. (Alex Edelman/AFP via Getty Images)

The number of available jobs in the U.S. labor market is shrinking, and fewer workers are quitting their positions, new data from the Bureau of Labor Statistics (BLS) show.

According to the federal agency’s monthly Job Openings and Labor Turnover Summary (JOLTS) report, job openings fell by 46,000, to 8.184 million, in June. This was also down by 941,000 from the same time a year ago and came in slightly higher than the consensus estimate of 8 million.

This is significantly down from the March 2022 peak of 12.2 million.

The job openings rate was flat at 4.9 percent.

Most of the gains in employment opportunities were concentrated in accommodation and food services (120,000) and state and local government excluding education (94,000). The number of job openings tumbled in durable goods manufacturing (negative 88,000) and the federal government (negative 62,000).

Job vacancies for May were adjusted up by 90,000, to 8.2 million. The number of hires was revised lower by 101,000, to 5.7 million, while the number of total separations was adjusted lower by 25,000, to 5.4 million.

Last month, total separations—layoffs, quits, and terminations—were little changed at 5.1 million, and the rate was flat at 3.2 percent.

In addition, the number of job quits declined by 3.282 million, the lowest level since November 2020. The quits rate—a gauge of voluntary job leavers as a proportion of total employment—was unchanged for the second consecutive month at 2.1 percent.

Concerns for the Future

Consumer confidence picked up in July, but consumers have trimmed their assessments about present conditions. That is according to The Conference Board’s latest Consumer Confidence Index report.

This month, the Consumer Confidence Index jumped in July from a downwardly revised June reading. The Present Situation Index—a measure of consumers’ assessment of current business and labor market conditions—declined from last month. The Expectations Index—a reflection of consumers’ short-term outlook for the labor market, business conditions, and income—surged in July.

“Compared to last month, consumers were somewhat less pessimistic about the future,” said Dana Peterson, the chief economist at The Conference Board, in the report.

“Expectations for future income improved slightly, but consumers remained generally negative about business and employment conditions ahead. Meanwhile, consumers were a bit less positive about current labor and business conditions. Potentially, smaller monthly job additions are weighing on consumers’ assessment of current job availability: while still quite strong, consumers’ assessment of the current labor market situation declined to its lowest level since March 2021.”

A hiring sign at a restaurant in Columbia, Md., on June 15, 2024. (Madalina Vasiliu/The Epoch Times)

Employment fears have been found in various reports over the last few months.

The Federal Reserve Bank of New York’s June Survey of Consumer Expectations highlighted that the “mean perceived probability of losing one’s job in the next 12 months” rose to 14.8 percent. The perceived odds of locating a job, if their current position was lost, rose to a six-month high of 53.4 percent.

The Federal Reserve’s monthly Beige Book report confirmed that employers were pausing on some hires and raising their hiring standards.

“Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation,” the central bank survey stated.

Back Into Balance

While the demand for labor remains elevated—job openings never topped 8 million before the coronavirus pandemic—the newest employment data suggest that “the labor market is settling back into a rhythm as demand for talent falls into its pre-COVID routine,” says Andrew Crapuchettes, the CEO of RedBalloon, in an emailed note to The Epoch Times.

In recent months, the Federal Reserve has stated that the labor market is coming into better balance.

“The labor market appears to be fully back in balance,” Fed Chair Jerome Powell told lawmakers at a July Senate hearing, adding that the employment situation was no longer “a source of broad inflationary pressures for the economy.

The next major labor update will be the July jobs report. Economists anticipate that the U.S. economy created 175,000 new jobs.

So far this year, the economy has added an average of 222,000 jobs per month, down from last year’s 251,000.

Mark Hamrick, the senior economic analyst at Bankrate, estimates the unemployment rate will hold steady at 4.1 percent. Because public policymakers do not want a further increase in the jobless rate, present conditions could support the case for a cut to interest rates in September, he noted.

“The Federal Reserve doesn’t want to see unemployment rise much from here and is likely prepared to begin cutting interest rates in September consistent with its dual mandate calling for balance between stable prices and maximum employment,” Mr. Hamrick said in the emailed note.

Fed policymakers will complete their two-day policy meeting of the Federal Open Market Committee (FOMC) on July 31. The futures market widely expects officials to leave rates unchanged within a range of 5.25–5.5 percent. However, investors are penciling in a quarter-point rate reduction in September, according to the CME FedWatch Tool.