The number of job vacancies in the United States in July dropped to the lowest level since the beginning of 2021, while layoffs increased, consistent with other signs indicating a slowdown in labor demand.

The Job Openings and Labor Turnover Survey (JOLTS) data released by the US Bureau of Labor Statistics on Wednesday showed that job vacancies in July fell from the revised 7.91 million in the previous month to 7.67 million. This data is lower than market expectations.

After the release of the report, gold rose in the short term and approached the $2500 level; the yield on US Treasuries for gold fell, and the S&P 500 index declined. The yield curve for US 2-year/10-year Treasury bonds turned positive for the second time since 2022.

After the data was released, Wall Street's bets on a rate cut by the Federal Reserve increased, and the Fed funds futures implied that the Fed will further ease monetary policy in 2024.

Chris Larkin of Morgan Stanley E*Trade said, "The market may not be as nervous as it was a month ago, but they are still looking for evidence that the economy is not cooling too much. They haven't received confirmation so far this week."

The decline in job vacancies is consistent with recent data showing a slowdown in the labor market, which has raised concerns among Federal Reserve officials. Job growth is slowing, unemployment is rising, and job seekers are finding it increasingly difficult to find work, exacerbating concerns about the economy potentially entering a recession.

Federal Reserve policymakers have made it clear that they do not want to see further cooling of the labor market and are expected to begin cutting interest rates at the next meeting in two weeks.

After the disappointing July employment data and significant salary cuts last year, Federal Reserve officials and market participants are closely watching the August employment data to be released on Friday, especially if this report is another weak one, the Fed may cut rates significantly. The market expects that the pace of hiring by U.S. companies will slow down and the unemployment rate will decrease.

The JOLTS report also shows that layoffs have risen to 1.76 million, the highest level since March 2023, with the most layoffs in the leisure and hospitality industry. At the same time, the number of job openings has slightly increased from the lowest level since April 2020.

Vacancies in the medical care, state and local government, as well as trade and transportation sectors have all decreased.