By WASHINGTON (Reuters) – U.S. job openings dropped to a 3-1/2-year low in July, suggesting the labor market was losing steam, but probably not enough for the Federal Reserve to consider a big interest rate cut this month.
Job openings, a measure of labor demand, had fallen by 237,000 to 7.673 million on the last day of July, the lowest level since January 2021, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report, on Wednesday. Data for June was revised lower to show 7.910 million unfilled positions instead of the previously reported 8.184 million.
Economists polled by Reuters had forecast 8.100 million job openings. Hires increased by 273,000 to 5.521 million. Layoffs rose 202,000 to a still-low 1.762 million.
The data suggested that the labor market is not cratering, but slowing in an orderly manner, which would reduce the need for the Fed to deliver a half-percentage-point interest rate cut at the U.S. central bank’s Sept. 17-18 policy meeting.
A 50-basis-point rate reduction was also put in doubt by strong consumer spending in July. A rise in the unemployment rate to near a three-year high of 4.3% in July rattled financial markets and ignited fears of a recession.
That was compounded by the government estimating last month that employment gains were overstated by 68,000 jobs per month in the 12 months through March.
But economists cautioned against viewing these developments as signs that the labor market was in trouble, arguing that a surge in immigrants had boosted the unemployment rate. They also noted that the data from which the government based its so-called payrolls benchmark revision estimate does not include undocumented immigrants, a group that they believe contributed to strong job growth last year.