Labor market continues to soften as job openings decline more than anticipated in July

Job openings dropped to their lowest level in 3½ years in July, according to the Labor Department’s Job Openings and Labor Turnover Survey. Available positions fell to 7.67 million, the lowest since January 2021. This decline may lead the Federal Reserve to lower interest rates at their next meeting in September. Layoffs increased to 1.76 million, while hires rose 273,000, indicating a slight improvement in the labor market. The professional and business services sector saw the biggest increase in job openings, while private education and health services, trade, transportation, and utilities, as well as government, all declined. Despite concerns of a slowing economy, the labor market is not cracking, as layoffs remain low and hires are increasing. However, demand for workers is softening relative to the supply of workers, which may continue due to restrictive policies. The report does not suggest rapid deterioration in the labor market. This data precedes the upcoming nonfarm payrolls count, which is expected to show an increase of 161,000 jobs and a decrease in the unemployment rate to 4.2%.

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