US job openings hit 3-1/2-year low in July

US job openings fell to a 3-1/2-year low in July, suggesting the labour market was losing steam. However, it is probably not enough for the US Federal Reserve to consider a big interest rate cut this month.

According to the Bureau of Labour Statistics’ Job Openings and Labour Turnover Survey (JOLTS) released on Wednesday, the available positions reached 7.67 million in July, down from a revised 7.91 million in June. This decline is consistent with recent data indicating a softening labour market, including slowing job growth, rising unemployment, and increased difficulty for job seekers.

While Federal Reserve officials have expressed concern about the cooling labour market, they are still expected to begin lowering interest rates at their upcoming meeting. However, the August employment report, due out on Friday, will be closely watched to determine the extent of any rate cut.

The number of layoffs rose to 1.76 million in July, the highest level since March 2023. However, hiring also picked up slightly from its lowest level since April 2020.

Openings fell in sectors such as healthcare, state and local government, and trade and transportation. The vacancies-per-unemployed worker ratio, closely watched by the Fed, declined to 1.1, the lowest in three years.

The quits rate, which measures the number of people voluntarily leaving their jobs, edged up slightly but remains near its lowest level since 2020. This suggests that job seekers may be less confident in their ability to find new positions.

Attribution: Bloomberg & US Bureau of Statistics