Employers in the United States advertised fewer job openings in July than in the previous month, a sign that hiring may slow in the coming months.
The Labor Department reported on Wednesday that there were 7.7 million job openings in July, down from 7.9 million in June. Nevertheless, the hiring rate increased from June to July.
Figures released on Wednesday showed that fewer companies are looking for new hires even as the latest data shows consumer spending is still growing. Last week, the government estimated that the economy grew at a healthy annual rate of 3% in the April-June quarter.
The number of job vacancies has shown a gradual downward trend over the past year. Even so, there are still about 1.1 job vacancies for every unemployed person, according to a report on Wednesday. This reflects the economy's continued need for workers and marks a change from before the pandemic, where there were always more unemployed people than available jobs.
The JOLTS jobs report for July is the first of several measures of the health of the labor market that will be closely watched by the Federal Reserve this week. If clear evidence emerges that hiring is slowing, the Fed may decide at its next meeting on September 17-18 to begin cutting key interest rates by half a percentage point. However, if hiring remains stable, a more typical rate cut of a quarter of a percentage point would be more likely.
On Thursday, the government will report how many laid-off workers applied for unemployment benefits last week. So far, most employers are keeping their workers, rather than imposing layoffs, although they have been slower to add jobs than earlier this year.
On Friday, the most anticipated economic report of the week monthly employment data will be released. Economists' consensus estimate is that employers added 163,000 jobs in August and the unemployment rate fell from 4.3% to 4.2%.
Last month, the government reported that job gains slowed in July to just 114,000, far less than expected and the second-smallest in 3 1/2 years, and that the unemployment rate rose for the fourth month in a row.
These figures fueled fears that the economy was seriously weakening and contributed to the fall in stock prices. Late last month, Fed Chairman Jerome Powell emphasized the central bank's increased focus on the job market, with inflation easing.
In a speech at the annual economic symposium in Jackson Hole, Wyoming, Powell said that hiring had "declined significantly" and the Fed did not "welcome further declines" in the job market. Economists see these comments as evidence that the Fed may accelerate interest rate cuts if it decides it is necessary to offset the slowdown in hiring.
