In July, the number of job vacancies in the United States decreased from the revised 7.91 million in the previous month to 7.67 million, marking the second consecutive monthly decline. Federal Reserve officials have explicitly stated that they do not want to see further cooling in the labor market, and it is widely expected that they will begin cutting interest rates at the next meeting.
USA job vacancy data for July fell to the lowest level since early 2021, while layoffs increased, consistent with other signs of slowing labor demand.
Data from the U.S. Bureau of Labor Statistics' Job Openings and Labor Turnover Survey released on Wednesday showed that the number of job vacancies in the United States decreased from the revised 7.91 million in the previous month to 7.67 million, marking the second consecutive monthly decline and falling below the market's expectation of 8.1 million.
Meanwhile, a recent series of data shows that the job market is softening, which has raised concerns among Federal Reserve officials. Job growth has been slowing, unemployment rates are rising, and job seekers are finding it harder to find work, intensifying people's concerns about a potential economic downturn.
Although a slowdown in job growth was expected, there are concerns that the labor market is not just temporarily adjusting under the pressure of the Federal Reserve's interest rate hikes to curb inflation, but is actually heading towards collapse.
Federal Reserve officials have explicitly stated that they do not want to see further cooling in the labor market, and it is widely expected that they will begin cutting interest rates at the next meeting in two weeks.
Following the disappointing job vacancy data in July and the significant downward revision of non-farm payrolls, Federal Reserve officials and market participants are closely watching the August employment data scheduled to be released on Friday. If the data falls short of expectations again, it could prompt the Federal Reserve to make a substantial interest rate cut.
According to the Bureau of Labor Statistics, job vacancy data decreased significantly, while the number of layoffs in July increased to 1.76 million people, the highest level since March 2023, mainly in the leisure and hospitality industry.
In addition, the ratio of job vacancies to available workers, closely monitored by the Federal Reserve, remained at 1.1:1, the lowest level in three years. In 2022, when it reached its peak, this ratio was 2:1.
The so-called quit rate has increased slightly to 2.1%, still close to the lowest level since 2020. This suggests that people are less confident in their ability to find new jobs compared to a few years ago.
After the data was released, interest rate swaps indicated that the Federal Reserve would further relax monetary policy in 2024. Chris Larkin, of Morgan Stanley E*Trade, said, "The market may not be as tense as it was a month ago, but they are still looking for evidence that the economy is not cooling down too much. So far this week, they haven't received confirmation."
Nick Bunker, Economic Research Director at Indeed Hiring Lab, commented that the labor market is no longer just cooling down to pre-pandemic levels, but has cooled down to even lower levels. He emphasized that no one, especially decision-makers at the Federal Reserve, should hope for further cooling of the labor market.
Editor/ping