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America's employers posted fewer job openings in July than they had the previous month, a sign that hiring could cool in the coming months.
The Labor Department reported Wednesday that there were 7.7 million open jobs in July, down from 7.9 million in June. The pace of hiring picked up, though, from June to July.
Wednesday's figures indicate that fewer companies are seeking to add workers despite recent data showing that consumer spending is still growing. Last week, the government estimated that the economy expanded at a healthy 3% annual rate in the April-June quarter.
The number of job openings has been trending gradually down over the past year. Yet there are still roughly 1.1 job openings for every unemployed person, Wednesday’s report showed. That reflects the economy's continuing need for workers and marks a reversal from before the pandemic, when there were always more unemployed people than available jobs.
The July report on job openings is the first of several measures this week of the labor market's health that the Federal Reserve will be watching closely. If clear evidence emerges that hiring is faltering, the Fed might decide at its next meeting Sept. 17-18 to start cutting its benchmark interest rate by a relatively aggressive half-percentage point. If hiring remains mostly solid, however, a more typical quarter-point rate cut would be likelier.
On Thursday, the government will report how many laid-off workers sought unemployment benefits last week. So far, most employers are largely holding onto their workers, rather than imposing layoffs, even though they have been slower to add jobs than they were earlier this year.
On Friday, the week’s highest-profile economic report — the monthly jobs data — will be released. The consensus estimate of economists is that employers added 163,000 jobs in August and that the unemployment rate ticked down from 4.3% to 4.2%.
Last month, the government reported that job gains slowed in July to just 114,000 — far fewer than expected and that the second-smallest total in 3 1/2 years — and the unemployment rate rose for a fourth straight month.
Those figures sparked fears that the economy was seriously weakening and contributed to a plunge in stock prices. Late last month, Fed Chair Jerome Powell underscored the central bank’s increasing focus on the job market, with inflations steadily fading.
In a speech at an annual economic symposium in Jackson Hole, Wyoming, Powell said that hiring has “cooled considerably” and that the Fed does not “seek or welcome further cooling” in the job market. Economists saw those comments as evidence that the Fed may accelerate its rate cuts if it decides it is needed to offset a slowdown in hiring.
