In Another Sign of Slowing Economy, Job Openings Dropped Faster Than Expected in June

In a sign that the white-hot labor market is starting to cool, the number of job openings in America declined faster than expected in June — and at a rate not seen since the early days of Covid pandemic.The Bureau of Labor Statistics reported that the number of vacancies fell more than 600,000, to about 10.7 million, at the end of June compared to the 11.3 million openings in May. Economists had been expecting the rate to decline to 11.1 million.While still high by historical standards, the data suggest that the pressure the overheated labor market is putting on the economy — and the Federal Reserve — may be easing and that the recession feared by many may be closer at hand than previously thought.Some economists said the data are a harbinger of worse to come. Speaking for the bears, the chief global strategist at Euro Pacific Capital, Peter Schiff, said, “Job openings look like they are about to go off a cliff. Mass layoffs will follow.”Others were more optimistic.“If the economy is rolling over, the labor market had apparently not gotten the memo yet as of the end of June,” the chief economist at Amherst Pierpont Securities, Stephen Stanley, told the Associated Press. “A case could be made for slight moderation from an egregiously overheated state, but that is about as far as I would go in assessing labor market conditions.”In its monthly Job Openings and Labor Turnover Survey, the labor department said that even after the decline, there are still 1.8 jobs open for every available employee. Hiring slowed during June, however, and the number of people quitting their jobs was unchanged but still well below the number seen earlier this year. The number of new hires fell for the fourth straight month.The Fed, which has a mandate from Congress to work toward full employment, monitors such data closely as it decides whether to continue increasing interest rates in order to slow down the economy and bring inflation, currently at its highest level in four decades, in check. A continued cooling of the job market could give the Fed the confidence to ease up on its interest rate increases.The White House has repeatedly held up the strong job market as evidence that the country is not in a recession, despite data last week showing that the economy contracted for the second quarter in a row during the second quarter — traditionally an indicator that the economy is already in a recession.“Most economists and most Americans have a similar definition of recession: substantial job losses and mass layoffs, businesses shutting down, private sector activity slowing considerably, family budgets under immense strain. In sum: a broad-based weakening of our economy,” Secretary Yellen said following last week’s data on the gross domestic product.“That is not what we’re seeing right now when you look at the economy,” the treasury secretary added. “Job creation is continuing, household finances remain strong, consumers are spending, and businesses are growing.”Tuesday’s data on job openings suggest the jobs part of the administration’s rosy economic outlook might be unraveling as companies begin to rethink new hires and cut existing jobs in the face of growing economic uncertainty. Companies announcing layoffs in recent weeks include e-commerce giant Shopify, which said it was cutting 10 percent of its U.S. workforce, or 1,000 employees, and Ford, which said it would cut 8,000 jobs. Amazon said it reduced its headcount by 100,000 during the quarter ending in June.

In Another Sign of Slowing Economy, Job Openings Dropped Faster Than Expected in June

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