WASHINGTON — U.S. employers posted fewer job openings in July than the previous month, a sign that employment could decline in the coming months.
The Labor Department reported Wednesday that there were 7.7 million unfilled job openings in July, down from 7.9 million in June. However, the pace of hiring increased from June to July.
Wednesday’s figures show that fewer companies are looking to hire workers, despite recent data showing consumer spending is still growing. Last week, the government estimated the economy was growing by a healthy annual interest rate of 3% in the April-June quarter.
The number of job openings has fallen gradually over the past year. Still, there are about 1.1 openings for every unemployed person, Wednesday’s report showed. That reflects the economy’s continued need for workers and marks a turnaround from pre-pandemic times, when there were always more unemployed than available jobs.
The July job openings report is the first of several measures of labor market health this week that the Fed will be watching closely. If there is clear evidence that hiring is faltering, the Fed could decide to cut its benchmark interest rate by a relatively aggressive half percentage point at its next meeting on Sept. 17-18. But if hiring remains largely solid, a more typical quarter-percentage-point rate cut would be more likely.
The government will report on Thursday how many laid-off workers filed for unemployment benefits last week. So far, most employers are largely holding on to workers rather than imposing layoffs, even though they have been slower to add jobs than earlier this year.
The most notable economic report of the week — the monthly jobs data — is released on Friday. The consensus estimate of economists is that employers added 163,000 jobs in August and that the unemployment rate fell to 4.2% from 4.3%.
Last month the government announced that Job growth slowed to just 114,000 in July — much lower than expected and the second lowest number in 3 1/2 years — and the unemployment rate rose for the fourth straight month.
Those numbers raised fears that the economy was seriously weakening and contributed to a plunge in stock prices. Late last month, Fed Chairman Jerome Powell stressed the central bank’s increasing focus on the labor market, while inflation was steadily declining.
In a speech at an annual economic symposium In Jackson Hole, Wyoming, Powell said hiring had “cooled significantly” and that the Fed did not seek or welcome “further cooling” in the labor market. Economists saw those comments as evidence that the Fed can accelerate its rate cuts if it decides it needs to do so to offset a slowdown in hiring.