JOBsNews — Job opportunities Jobs are slowly disappearing in the United States, and hiring has reached its slowest pace in a decade (aside from the pandemic downturn). That’s causing more workers to hold on to the jobs they already have.
The good news is that those jobs don’t appear to be disappearing.
That’s according to the latest job openings and job turnover data from the Bureau of Labor Statistics. A survey showed the number of job openings fell slightly in June, hiring activity sank, layoffs were moderate and the number of people quitting their jobs hit a three-year low, according to data released Tuesday.
It’s another sign that the once red-hot job market is… Not only settling into a more stable state but potentially approaching a downward phase.
“While Tuesday’s data show the labor market cooling at a manageable pace, warning signs continue to emerge,” Wells Fargo economists Sarah House and Aubrey George wrote in a note to clients published Tuesday. “Labor demand remains concentrated in a few industries, workers are hunkering down and feeling less confident about the availability of jobs, and businesses are more reluctant to hire new employees.”
In June, employers posted an estimated 8.18 million jobs. While that’s more than economists had expected, it’s a small step back from the previous month. Figure revised upwards to 8.23 million vacancies in May according to the JOLTS report.
It’s also the second-lowest monthly total seen so far this year, and puts the ratio of job openings to job applicants at 1.24, slightly above the average seen in 2019, BLS data show.
Economists had expected job openings to fall to 8 million, according to FactSet consensus estimates.
Last month, hiring was one of the weakest in years: An estimated 5.34 million hires and the hiring rate (number of hires as a percentage of employment) were the lowest since April 2020, when the labor market collapsed at the start of the pandemic. Outside of the pandemic, the hiring rate hadn’t been this low since February 2014, BLS data show.
We’ve seen a pretty dramatic slowdown in hiring, and that’s accompanied by a slow rate of quits,” Daniel Zhao, chief economist at online job search and employment site Glassdoor, told JOBsNews. “And I think taken together, the slow hiring and the quits point to a labor market that lacks healthy turnover.”
“Employers are not hiring as aggressively, which means employees are not finding those next opportunities to advance their careers and are instead sitting on the sidelines and prioritizing job security,” she added.
Beyond the number of job openings, economists have been closely watching the quit rat or the number of people who voluntarily leave their jobs as a percentage of total employment. That metric serves as a signal of workers’ willingness to test the labor market.
In June, that rate remained at 2.1%, the lowest since June 2020; however, the estimated number of resignations fell to 3.282 million from 3.403 million and was the lowest monthly total since November 2020.
One bright spot for workers and the overall health of the labor market: Layoffs plummeted in June to an estimated 1.498 million, the lowest level since November 2022. Although Weekly unemployment insurance claims have been slowly increasing, layoff activity is well below pre-pandemic levels, Zhao said.
“When I look at the hard economic data on layoffs, I don’t think the current situation is a red flag, but clearly, it’s something that workers are still very concerned about,” Zhao said, noting that Glassdoor’s most recent survey showed low employee confidence.
The low level of layoffs, he added, indicates that employers are probably simply being cautious and that there is some pent-up demand to resume hiring.
“The signal we’re getting now is more one of caution than a more serious deterioration in economic conditions,” he said. That can’t last forever, right? So I think we’re waiting for a catalyst in either direction.”
The most likely catalyst? When the Fed finally pulls the trigger to start a cycle of rate cuts.
After launching one of the most aggressive monetary tightening campaigns, starting in March 2022, the US central bank has kept interest rates at their highest level in 23 years over the past 12 months, expecting inflation to show a sustained deceleration path.
That has happened certainly in recent months; however, Fed officials It is true that they are more in tune with the stability of the labor market, which has cooled and experienced an Unemployment rate that continues to rise.
The Federal Reserve will announce its latest interest rate decision on Wednesday, which is expected to be another pause. Markets are projecting that The first rate cut will occur in September.
“I don’t think (a September rate cut) is too late, but I understand why the Fed should cut rates earlier,” Zhao said. “The difficulty with this is always that monetary policy operates with long and variable lags; so we’ve already seen a fairly sharp slowdown in the housing market, and if a rate cut happens in September, the question is how long it will take to be reflected in the labor market.”
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