Job Openings Dip in July, Signals Labor Downturn

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Hiring in July ROSE 4.1 percent from June to 5.95 million
  • Job openings at the end of July FELL 0.4 percent to 7.22 million;
  • The ratio of job openings per unemployed EDGED DOWN to 1.19 in July from 1.21 in June.

Trends:

  • Job openings dropped to the lowest level since May 2018: 7.13 million
  • Hiring in July rose to the second highest level since the JOLTS data began in December 2000; highest level was 5.99 million in April this year;
  • July hires represented 82.1 percent of end-of-June job openings, highest percentage since May 2018;
  • Number of job openings fell for the second straight month for the first time since December 2016-January 2017;
  • Job openings per unemployed fell for the fourth straight month for the first time since 2008-2009.

Data Source: Bureau of Labor Statistics

Image result for jobs

There were more warning signs about the job market Tuesday in the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) report.

Indeed, employers may have dipped as deep as they could in July into the pool of available workers, filling 82.1 percent of June’s end-of-month job openings. As a result, job openings at the end of July were down to a 14-month low, falling for the first time in more than two years.

And, the ratio of job openings per unemployed, though well-below Great Recession levels, fell for the fourth straight month making getting a job from unemployment more challenging. That said, the number of “quits” rose almost 4 percent in July to 3.59 million, all all-time high. Even though the number of layoffs-and-discharges rose in July, the ratio of quits to layoffs-and-discharges remained at 2:1.

With the sharp increase in hires in July, the nation remained on pace to exceed last year’s total of 68.9 million hires though separations are in pace as well.

While those numbers suggest another good labor market year, it’s the short-term outlook that could be cloudy. The high “usage” rate of job openings suggested a slowdown in hiring and indeed the BLS’ Employment Situation report last week showed an increase of 130,000 new payroll jobs, weaker than had been expected and disappointing (except, of course, for those who got the new jobs!).

The outlook remains dim though in several industry sectors. The number of job openings fell in July in construction, leisure-and-hospitality, wholesale-and-retail trade and professional and business services even as the number of unemployed in several of those sectors rose.

You can hear Mark Lieberman on P.O.T.U.S Morning Briefing (Sirius 124) every Friday at 6:20 am Eastern Time. Follow him on Twitter at @foxeconomics.

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