Job openings across the world’s largest economy dropped to the lowest since January of 2021 on the last business day of July, closely-watched BLS data released on Wednesday showed.
The 7.673 million headline JOLTS print was a mile below consensus. Economists collectively expected 8.1 million. The prior month was revised lower, making the drop even more impressive.
The undershoot adds to a growing body of evidence which suggests the US labor market’s finally cooling, and anyway isn’t likely to be a source of rekindled price pressures (through the wage channel) going forward. I realize that’s just a mindless recitation of Jerome Powell’s new talking points, but for now anyway, those taking points are consistent with the incoming data.
Notably, the hires series in the JOLTS release showed an uptick, but from a downwardly-revised prior. The series now shows a 407,000 decline for June, the second-largest ever outside of the months around the original pandemic lockdowns. For perspective, hires fell 444,000 in November of 2008.
That’s the context for the 273,000 rebound in the hires series from Wednesday’s update. As you might imagine, the fillip was led by accommodation and food services. As the figure shows, the hires series still sits near the lowest levels of the pandemic recovery years.
Layoffs and discharges moved up, as did the implied layoff rate, but both are still below pre-pandemic levels. The quit rate moved up a tenth, but from a downwardly-revised 2 in the prior release.
Outside of the distortions associated with the onset of COVID, 2 — the revised quit rate for June — was the lowest since January of 2018.
All in all, we can say the transition to a “limited hiring, limited firing” regime (as one commentator described it to Bloomberg last month) is ongoing. Employers aren’t hiring at anywhere near the frantic pace that typified the inflation years, but neither are they letting workers go. And although the number of workers voluntarily “separating” themselves remains elevated by pre-2018 standards, the rate’s receded such that churn (and the implications of churn for wage pressures) isn’t an issue for monetary policy.
Speaking of monetary policy, the JOLTS-implied openings-to-unemployed ratio monitored by the Fed as a key “immaculate disinflation” barometer dropped to 1.07.
As the figure shows, that’s the lowest since May of 2021.
The US is now (effectively) back to one open job for everyone counted as “officially” jobless, with the usual caveat: Just because there’s a job out there for you doesn’t mean it’s a job you’ll necessarily want.
I realize that’s suboptimal, but with openings declining steadily and hiring momentum decelerating, I’d gently suggest not looking a gift horse in the mouth if you’re jobless. The labor market can, and generally does, turn on a dime.
