The latest Job Openings and Labor Turnover Survey (JOLTS) report from the Labor Department reveals that U.S. job openings have dropped to their lowest level since March 2021. This decline suggests a gradual slowdown in the labor market, leading to expectations that the Federal Reserve will maintain interest rates unchanged in the coming month. The report also highlights a decrease in the number of people quitting their jobs, indicating decreased confidence in the labor market among Americans.
Despite the tightening labor market conditions, with 1.51 job openings for every unemployed person, economists believe that the excess demand decline is mainly due to companies reducing vacancies rather than increasing layoffs and unemployment. The decrease in job openings was primarily seen in professional and business services, healthcare and social assistance, and state and local government sectors.
In contrast, the transportation sector saw an increase in open positions. The report suggests declining job openings could result in slower growth in August. As a result, industry experts anticipate that the Federal Reserve will keep interest rates unchanged in September.