U.S. job openings increased in July amid a surge in manufacturing vacancies, but weak hiring suggested the labor market remained in a holding pattern.
Job openings, a measure of labor demand, had risen by 89,000 to 7.271 million by the last day of July, the Labor Department’s Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday. Data for June was revised lower to show 7.182 million unfilled positions instead of the previously reported 7.359 million.
Economists polled by Reuters had forecast 7.300 million unfilled positions in July. The response rate to the JOLTS survey has dropped to just above 30% from around 58% before the COVID-19 pandemic, leading some economists to caution against placing too much emphasis on the report when trying to gauge the labor market’s health.
The labor market is generally viewed as stable, which economists say should allow the Federal Reserve to keep its eye on stubbornly high inflation. Fed Chairman Kevin Warsh said on Friday the U.S. central bank will “have work to do” if policymakers don’t get the confidence they need that inflation is falling to the 2% target.
Financial markets are pricing in a roughly 66% chance that the Fed will raise its benchmark overnight interest rate by 25 basis points at its September 15-16 meeting, according to CME Group’s FedWatch tool. The Fed funds rate is currently in the 3.50%-3.75% range.
Unfilled jobs in the manufacturing sector increased by 79,000 in July, nearly all of them in the durable goods industries. There were 65,000 job openings in the professional and business services sector. The overall job openings rate rose to 4.4% from 4.3% in June. Hiring dropped by 278,000 to 5.054 million in July, led by a decline of 188,000 in the professional and business services sector. The hires rate fell to 3.2% from 3.4% in June.
Layoffs and discharges decreased by 119,000 to 1.666 million, with the rate easing to 1.0% from 1.1% in June. Historically low layoffs mostly account for the employment gains this year.
A Reuters survey of economists expects nonfarm payrolls to have rebounded in August after a surprise decline in July. The government will publish its closely watched employment report on Friday.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
