The number of job vacancies fell in June
Job postings fell to 10.7 million in June from a revised 11.3 million in May, according to the latest Job Postings and Labor Turnover Survey, or JOLTS. This is the lowest level since September 2021, but still above pre-pandemic levels of 7 million.
The retail and wholesale trade sectors experienced the largest drop in job vacancies.
There were 5.91 million unemployed people in the United States in June, so there were 1.8 jobs available for every person looking for work.
The total number of hirings and departures was little changed from May: around 6.4 million people were hired, down slightly from 6.5 million in May. And the number of workers who left their jobs was 4.24 million, largely unchanged from the previous month.
Layoffs totaled 1.3 million, down from 1.4 million in May.
At 600,000, the drop in job openings was the largest monthly drop on record outside of the pandemic lockdown months of March and April 2020, according to BLS data, which dates back to December 2000.
Jobs unfilled in this way could be a sign of labor market weakness in the coming months and hiring could slow, said Julia Pollak, chief economist at ZipRecruiter.
“When openings drop, it shapes everything else,” she told CNN Business.
When there are fewer job openings to choose from, people become more reluctant to quit their jobs because they become less likely to find something new, she said, adding that it is also a sign that hiring activity will slow as employers become more uncertain.
“When recessions hit, many people think that layoffs are the main reason for rising unemployment and falling employment levels, but that’s actually not what’s happening. Layoffs don’t usually pick up again only very, very slightly,” she said. “The action during a recession is in job postings and hiring, and job postings drop quite dramatically during a recession.”
With little change in the number of separations or resignations, it shows that employers are suppressing job offers instead of turning to layoffs, said Layla O’Kane, senior economist at Lightcast.
“Employers are saying ‘we’re not going to lay off, but we’re going to give up on finding some of the talent we want,'” O’Kane said in the statement.
This is good news for the Federal Reserve, said Nick Bunker, director of economic research at Indeed Hiring Lab. The central bank is looking for a slowdown in demand, implementing a series of sharp interest rate hikes to bring down the highest inflation in 40 years.
That means the ratio of job openings to unemployed has become a favored labor market indicator for the Fed, Bunker said. A higher ratio of openings to unemployed indicates a fairly tight labor market.
“If their goal is to get the ratio closer to 1, then they have a ways to go,” he said.