Job openings fell for the third month in a row in June. This indicates that the US’s frenzied labor market is starting to cool.
Employers posted 10.7 million vacancies on the Labor Department at the end of June said on TuesdayThis is high by historical standards, but down significantly from 11.3 million in May and a record high of 11.9 million in March. It was the biggest one-month decline in his 20 years that the government has tracked this data, not including two months when the 2020 coronavirus pandemic began.
The decline is concentrated in retail, a recent sign that consumers are shifting their spending from goods to services. But the number of vacancies in the leisure and hospitality industries, which suffered the most from last year’s labor shortages, is also down.
The job market remains strong by most indicators. Job openings in June are still about double the number of unemployed, with employers raising salaries and offering other incentives to attract and retain workers.Layoffs hit record low in June approaching standards, suggesting employers were reluctant to let go of hard-working staff. And although down from last year’s peak, the number of workers who voluntarily quit their jobs remains high.
The recent reduction in openings could be heartening news for Federal Reserve policymakers looking to slow the economy to keep inflation in check. Federal Reserve Chairman Jerome H. Powell and other officials point to vacant jobs as evidence that the labor market is overheating. They hope employers will be able to reduce job postings and hiring numbers before they start layoffs, allowing the job market to cool without triggering a spike in the unemployment rate.
Still, a slowdown in the job market means workers will have less power to demand pay raises if wages are already not keeping up with inflation. Weaker wage growth could reduce consumer spending and increase the risk of a US recession.
Wells Fargo senior economist Tim Quinlan said the labor market was “definitely losing momentum, and that’s hurting people’s ability to spend.”
Economists and policymakers will get an update on the job market on Friday, when the Labor Department releases data on jobs and unemployment in July. A forecaster surveyed by FactSet expects the report to show employers added about 250,000 jobs last month, down from 372,000 in June.
