U.S. July Job Openings: Fall to Lowest Level in 3 Years and a Half

Economic

Data Interpretation

Summary:

The number of job openings was little changed at 7.673 million, the lowest level since January 2021, according to the report from the U.S. Bureau of Labor Statistics on Wednesday. The number of layoffs increased, with the rate of layoffs and discharges falling to 1.1 percent, the lowest in three years, showing signs of weakness in the labor market.

On September 4, the U.S. Bureau of Labor Statistics released the JOLTS job openings data for July:

The number of job openings was 7.673 million in July, while the expectation was 8.1 million and the previous month recorded 7.91 million (revised).

The rate of layoffs and discharges was 1.1:1, compared to the previous 1.2:1.

Data shows that the number of job openings fell to the lowest level since the beginning of 2021, far lower than the expected 8.1 million. The previous reading was revised downward from 8.184 million to 7.91 million. The rate of layoffs and discharges was 1.1, slipped significantly compared to June, and hit the lowest level in three years.

Job openings increased in professional and business services (+178,000), but declined in private education and health services (-196,000). Meanwhile, job openings dropped in trade, transportation and utilities (-157,000), as well as in federal government (-92,000).

Hires: In July, the number and rate of hires changed little at 5.5 million (an increase of 273,000 from June) and 3.5 percent (up from 3.3 percent), respectively. Both remained at a low level. Leisure and hospitality were low, rebounding from the abnormal 4.5 percent in June to 5.5 percent. The federal hiring rate plunged from 1.7 percent in March to 1.4 percent in July.

Separations: Separations increased to 5.4 million in July, or 3.4 percent. The number of job openings was substantially decreased in health care and social assistance. Moreover, the number of quits was unchanged at 3.3 million but was down by 338,000 over the year. Over the month, the quits rate changed a little at 2.1 percent. The number of separations hit 1.76 million, the highest level since March 2023 with the majority in leisure and hospitality. The rate of layoffs and discharges rose slightly to 1.1 percent.

The balance between labor supply and demand is shifting due to declining job openings, and rising layoffs and unemployment. In addition, signs of labor market weakness become more pronounced, heightening concerns about a potential recession and heating up expectations for a rate cut. After the JOLTS report was released, the market's expectations for a 50-bps rate cut in September rose to 45 percent.

U.S. July JOLTs

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U.S. July Job Openings: Fall to Lowest Level in 3 Years and a Half

U.S. July JOLTs

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