The Labor Department reported a slight decrease in U.S. job openings last month, indicating a cooling labor market amidst high interest rates. Job vacancies dropped from 8.23 million in May to 8.18 million in June. Despite the Federal Reserve’s efforts to combat inflation by raising interest rates to a 23-year high, the U.S. economy has remained resilient.
Since reaching a peak of 12.2 million, job openings have been steadily decreasing. The current figure of 8.2 million is still robust, surpassing any monthly job openings before 2021. The Fed sees the decline in vacancies as a way to cool the job market without resorting to layoffs and to alleviate pressure on companies to increase wages, which could fuel inflation.
Job growth has also slowed down, with employers adding an average of 222,000 jobs per month this year, a decrease from previous years. The Labor Department is set to release July’s job creation and unemployment numbers later this week. Forecasts suggest the economy likely added 175,000 jobs in July, compared to 206,000 in June, with the unemployment rate expected to remain steady at 4.1%.
The Federal Reserve is expected to keep interest rates unchanged during its upcoming meeting but may start reducing them at the following gathering in September.
