Job vacancies fell more than expected in July

Job openings fell to their lowest level in three and a half years in July, the Labor Department reported Wednesday in another sign of weakness in the labor market.

The department’s closely watched survey of job openings and labor turnover showed available positions fell to 7.67 million in the month, down 237,000 from June’s downwardly revised figure and the lowest level since January 2021.

Economists polled by Dow Jones had expected 8.1 million.

With this drop, the ratio of job openings per available worker fell to less than 1.1, about half of what it was since its peak of more than 2 to 1 in early 2022.

The data is likely to provide more ammunition for Federal Reserve officials, who are expected to begin cutting interest rates when they meet for their next policy meeting on Sept. 17-18. Fed officials are closely watching the JOLTS report as an indicator of labor market strength.

“The labor market is no longer cooling back to its pre-pandemic temperature, but has surpassed it,” said Nick Bunker, director of economic research at Indeed Hiring Lab. “No one, and certainly not Federal Reserve policymakers, should want the labor market to cool further right now.”

While the level of job openings declined, layoffs rose to 1.76 million, up 202,000 from June. Total separations rose by 336,000, bringing the separation rate as a percentage of the labor force to 3.4%. However, hiring also rose, up 273,000 for the month, putting the rate at 3.5%, or 0.2 percentage points better than June.

The report comes two days before the Labor Department’s crucial August nonfarm payrolls tally on Friday. The report is expected to show an increase of 161,000 and a slight decline in the unemployment rate to 4.2%.