Job openings in the U.S. fell by much more than expected in July, suggesting that the extremely tight labor market may be loosening a bit.
The Labor Department’s Job Openings and Labor Turnover Survey, known as JOLTS, showed Tuesday that there were 8.827 million job vacancies at the end of July. Economists had forecast 9.559 million jobs.
The prior month’s estimate of openings was revised down from 9.582 million to 9.165 million, indicating that the labor market was not as strong as previously thought.
Job openings fell sharply in professional and business services, declining by 198,000. Health care and social assistance postings fell by 130,000. State and local government education openings fell by 62,000. The federal government’s vacancies fell by 27,000.
Openings in manufacturing fell to 555,000 from 580,000. Hires in manufacturing, however, edged up from 396,000 to 402,000.
Information job openings grew by 101,000. Transportation, warehousing, and utilities job openings rose by 75,000.
Although openings declined, layoffs remain low. In July, the number of layoffs and discharges changed little at 1.6 million, around one percent of the labor force.
The number of quits decreased to 3.5 million, a decline of 253,000 from the previous month. The quits rate, a key measure of worker confidence in the labor market, was little changed at 2.3 percent.
With the decline, the ratio of job openings to unemployed persons fell to 1.51, the lowest level in over a year. The Federal Reserve is likely to look at the decline in openings and the ratio of openings to unemployment as welcome developments in its effort to bring inflation down.
Despite the recent declines, job openings remain far above where they were prior to the pandemic. In February of 2020, there are 6.995 million openings. The peak of openings in the pre-pandemic era came in November of 2018, when openings rose to 7.594 million.