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The US labour market seems to be cooling down as job openings hit its lowest point in over two years, reported CNN citing data from the US Bureau of Labour Statistics.
The latest job turnover report for June showed that the number of available positions in the US dipped for the second consecutive month this year, falling to a seasonally adjusted 9.5 million, or 1.6 jobs per job seeker. The media outlet said that the dip was in line with expectations.
The downfall was below May’s downwardly revised 9.61 million total, and was a pullback from the 12 million plus open job openings seen in March of last year, according to the bureau Job Openings and Labor Turnover Survey (JOLTS) report.
CNN believes that the data is an indication to the Federal Reserve that the economy was going ahead in the right direction.
The US central bank has, so far, increased the benchmark interest rate 11 times since March 2022, making the policy rate the highest since 22 years.
The increase was done as the Fed wanted to decrease demand and tame inflation without harming the labour market and stopping the economy from going into a recession. This has been termed as a soft landing.
“It is looking like a soft landing, but the problem is that we won’t know whether this is a soft landing or whether conditions continue to weaken further and we get a recession four or five months from now,” Gus Faucher, an economist with PNC Financial Services, told CNN.
“Both a recession and a soft landing look like this.”
The data also showed that in June on a month-on-month basis, the number of new hires dropped from 6.2 million to 5.91 million, quits went down from 4.067 million to 3.7 million, while layoffs saw a slight dip from 1.546 million to 1.527 million.
In the US market, an uptick of job openings was seen in industries such as health care and state and local government, apart from education which saw a decline. Job openings also dipped in industries such as transportation, warehousing and utilities and the federal government.
“Job openings fell to their lowest level since April 2021, but there is still a large gap between the long-term average level, or one consistent with slack in the labour market,” wrote Oxford Economics economists Matthew Martin and Ryan Sweet in a note which CNN said was issued on Tuesday.
“Further, while the quits rate fell, the measure is quite volatile, and is still at a level that indicates continued pressure on wages as many workers leave jobs in search of other (higher-paying) opportunities.”
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