WASHINGTON, D.C. — U.S. job openings fell slightly last month, indicating that the American labor market continues to cool due to high interest rates.
There were 8.18 million job vacancies in June, down from 8.23 million in May, the Labor Department reported Tuesday. The June number was stronger than expected: Forecasters had expected 8 million job openings.
Still, the report showed other signs of a slowing job market. Employers hired 5.3 million people, the fewest since April 2020 when the pandemic was hammering the economy. The number of people quitting their jobs — a decision that reflects confidence in their ability to find higher pay or better working conditions elsewhere — slid to 3.3 million, the fewest since November 2020.
However, layoffs dropped to 1.5 million, the lowest since November 2022 and down from 1.7 million in May, a sign that employers remain reluctant to let go of staff.
Vacancies rose at hotels and restaurants and at state and local governments (excluding schools).
Job openings in North Carolina are at a rate of 5.4%, with openings at 287,000.
The U.S. economy and job market have proven resilient despite the Federal Reserve’s aggressive campaign to tame inflation by raising its benchmark interest rate to a 23-year high. But higher borrowing costs have taken a toll: Job openings peaked at 12.2 million and have come down more or less steadily ever since.
Still, 8.2 million is a strong number. Before 2021, monthly job openings had never topped 8 million.
“Labor demand is cooling though still strong, and firms continue to be extremely hesitant to lay anyone off in the wake of the acute labor shortages of 2021 and 2022,″ Stephen Stanley, chief economist at Santander, said in a research note.
Compared to layoffs, the Fed views a vacancy drop as a relatively painless way to cool a hot job market and reduce pressure on companies to raise wages, which can feed inflation.
Job growth has slowed, too. So far this year, employers are adding an average of 222,000 jobs a month. That is a healthy number but down from an average of 251,000 last year, 377,000 in 2022 and a record 604,000 in 2021 as the economy roared back COVID-19 lockdowns.
The Labor Department releases July job creation and unemployment numbers on Friday. According to a survey of forecasters by the data firm FactSet, the economy likely created 175,000 jobs in July, decent but down from 206,000 in June. The unemployment rate is forecast to have stayed at a low of 4.1%.