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U.S. employers slash job openings, but hold off on layoffs

August 2, 2022, 3:50 PM UTC
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A "help wanted" sign is displayed in a window in Manhattan on July 28, 2022 in New York City.
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U.S. job openings fell in June to a nine-month low, suggesting tightness in the labor market is easing somewhat amid growing economic pressures.

The number of available positions decreased to 10.7 million in the month from an upwardly revised 11.3 million in May, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday. The 605,000 decline was the biggest since April 2020.

The level of openings was lower than all but one estimate in a Bloomberg survey of economists.

“Fewer openings likely mean the froth is being blown off inflated listings for openings as the economy slows down, not that demand for workers is dropping,” Robert Frick, corporate economist at Navy Federal Credit Union, said in a note.

Despite the drop, the number of vacancies remains elevated as demand for workers broadly outweighs supply. That has contributed to a pickup in labor costs, though wage growth is falling short of inflation for many Americans.

The job market has been a bright spot in an economy otherwise losing momentum and possibly heading toward a recession as the Federal Reserve aggressively raises interest rates. Some of the strength is starting to come undone as companies like Shopify Inc. and Amazon.com Inc. either cut jobs or freeze hiring amid economic uncertainty.

Even so, employers continue to report difficulty attracting and retaining workers. The JOLTS data precede Friday’s monthly jobs report, which is currently forecast to show the U.S. added roughly 250,000 payrolls in July and the unemployment rate held near a 50-year low.

What Bloomberg Economics says…

“Bloomberg Economics estimates sturdy inflation and wage growth will keep the Fed hiking longer and to a higher endpoint than markets currently expect, with a recession as our base case. As for July, we estimate a rise in the unemployment rate in data to be released Aug. 5.”

—Andrew Husby and Yelena Shulyatyeva, economists

There were about 1.8 jobs for every unemployed person in June, down slightly from May. The biggest drops in vacancies were in retail and wholesale trade as well as state and local government education. Construction also fell.

Some 4.2 million Americans quit their jobs in June, little changed from the prior month. The quits rate, a measure of voluntary job leavers as a share of total employment, held at 2.8%.

Layoffs dropped slightly in June while hiring eased somewhat.

—With assistance from Chris Middleton.

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