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The number of job openings continued to drop in July, the Labor Department reported Tuesday, another sign that the U.S. labor market is losing its momentum.
There were 8.8 million job openings last month, down from about 9.2 million in June and the lowest level since March 2021, according to the Job Openings and Labor Turnover Survey. The amount of people quitting their jobs, a measure of workers’ confidence in the job market, continued nudge down in July as well.
Why It Matters: Implications for interest-rate policy.
Labor market data is closely watched by policymakers at the Federal Reserve as they combat stubborn inflation.
Fed policymakers lifted interest rates to a range of 5.25 to 5.5 percent in their last meeting in July, the highest since 2001. Only one Fed meeting has passed since March 2022 where the central bank has not raised rates. Some investors hope that signs the labor market is continuing to cool will push the Fed to end its campaign of rate increases sooner.
Jerome H. Powell, the chair of the Federal Reserve, signaled on Friday that the central bank was not ruling out more rate increases.
“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” Mr. Powell said at the Federal Reserve Bank of Kansas City’s annual Jackson Hole conference in Wyoming.
Background: A surprisingly robust labor market.
The U.S. labor market has defied expectations by remaining strong despite the Fed’s mission to slow down the economy by raising interest rates.
Consistently strong labor data initially fueled predictions that the Fed would continue rate increases until the economy fell into a recession. Many have taken a more optimistic view recently as inflation has begun to moderate alongside a strong labor market.
What’s Next: The August jobs report on Friday.
The August employment report will be released by the Labor Department on Friday.
The unemployment rate dropped to 3.5 percent in July, a sign that although the labor market is cooling, workers are generally still able to find opportunities. The unemployment data for August will be one of the last labor market pulses Fed policymakers will get before their next meeting on Sept. 19-20.
J. Edward Moreno is the 2023 David Carr fellow at The Times. More about J. Edward Moreno
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