A new report revealed that the number of job openings in the U.S. has dropped to its lowest level in nearly four years.
The U.S. Labor Department reported that open positions dropped to 7.67 million,
237,000 fewer than June’s numbers and the lowest the Job Openings and Labor Turnover Survey has been since January 2021, NBC News reported.“The labor market is no longer cooling down to its pre-pandemic temperature. It’s dropped past it,” said Nick Bunker, head of economic research at the Indeed Hiring Lab. “Nobody, and certainly not policymakers at the Federal Reserve, should want the labor market to get any cooler at this point.”
Instead, Dow Jones economists expected the number of open positions to be 8.1 million. With the current estimate, the ratio of job openings per available worker is now down to 1.1, roughly half of its more than 2 to 1 peak reported in early 2022.
On the other hand, with the job openings level on a steady decline, the number of layoffs across the U.S. has risen to 1.76 million. This is 202,000, higher than the number reported in June. The job separations rate has risen to 3.4% thanks to a surge in total separations by 336,000.
Despite the rising number of layoffs and separations, the number of hires also rose, with 273,000 more, or a rate of 3.5%, more than what was recorded in June.
Krishna Guha, head of the Global Policy and Central Bank Strategy Team at Evercore ISI, said that while the July report raised eyebrows about the economy slowing, it “does not suggest any rapid deterioration in the labor market.”
“The still low level of layoffs and tick up in hires suggests the labor market is not cracking,” he said. “But demand for workers continues to soften relative to the supply of workers, and a forward perspective suggests this is likely to continue under restrictive policy.”
His expectations of the market seemingly came true in a new report pulled Friday, Sept. 6. The report revealed that the U.S. labor market picked up last month, with employers adding roughly 142,000 jobs. Per Factset, economists anticipated a gain of 160,000 jobs and a drop that would put the unemployment rate at 4.2%.
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