U.S. Job Openings Hit 3.5-Year Low

WASHINGTON (Reuters) – U.S. job openings dropped to a 3-1/2-year low in July, suggesting the labor market was losing steam, but probably not enough for the Federal Reserve to consider a significant interest rate cut this month.

Job openings, a measure of labor demand, fell by 237,000 to 7.673 million at the end of July, the lowest level since January 2021, according to the Labor Department’s Bureau of Labor Statistics in its Job Openings and Labor Turnover Survey (JOLTS) report released Wednesday. The June data was revised lower, indicating 7.910 million unfilled positions instead of the previously reported 8.184 million.

Economists polled by Reuters had forecast 8.100 million job openings. Hires rose by 273,000 to 5.521 million, while layoffs increased by 202,000 to a still-low 1.762 million.

The data suggest that the labor market is not collapsing but is slowing in an orderly way, which would lessen the urgency for the Fed to deliver a half-percentage-point interest rate cut at its policy meeting on Sept. 17-18.

A 50-basis-point rate reduction was also cast into doubt by strong consumer spending in July. A rise in the unemployment rate to nearly a three-year high of 4.3% in July unsettled financial markets and raised recession fears.

This was compounded by government estimates last month suggesting employment gains were overstated by 68,000 jobs per month over the year ending in March.

However, economists warned against interpreting these developments as indicators of a troubled labor market, pointing out that an influx of immigrants had driven up the unemployment rate. They noted the payrolls benchmark revision estimate does not account for undocumented immigrants, a group believed to have contributed to strong job growth last year.