US job openings fall to 7.271M in July, below estimates

The US labor market added fewer job openings than expected in July, with the Bureau of Labor Statistics reporting 7.271 million vacancies in its latest JOLTS release. Economists had penciled in roughly 7.313 million, making the miss small in absolute terms but meaningful in what it signals: the long, slow normalization of the labor market is still very much underway.

The figure did represent a modest uptick from June’s 7.182 million openings.

The numbers behind the numbers

The job openings rate held steady at 4.4%, unchanged from the prior month.

Hires and total separations both came in flat at 5.1 million. Quits registered at 3.1 million, while layoffs totaled 1.7 million.

The sector-level data tells a more interesting story. Durable goods manufacturing posted a notable gain of 76,000 new openings. On the other side of the ledger, professional and business services saw hires drop by 188,000.

The long descent from 12.3 million

At the post-pandemic peak in March 2022, the US economy had 12.3 million job openings. From that high-water mark, the economy has shed roughly 5 million openings over the past four-plus years. The current 7.271 million figure sits closer to pre-pandemic norms, when openings typically hovered in the 6 to 7 million range.

Both the hires rate and the separations rate stood at 3.2%.

What this means for the Fed and the economy

The JOLTS report is one of the Federal Reserve’s favorite data points for gauging labor market tightness. The steady 4.4% openings rate suggests that the labor market isn’t loose enough to signal recession fears, but it’s also not tight enough to reignite wage-driven inflation pressures.

The next JOLTS release covering August data is scheduled for September 29.