The number of open jobs in the US fell to its lowest level in more than two years last month as signs of a slowdown in the labor market grew in July.
The latest Job Opening and Labor Turnover Survey, or JOLTS report, released Tuesday revealed there were 8.8 million jobs open at the end of July, a decrease from the 9.16 million job openings in June. Economists surveyed by Bloomberg had expected there were 9.5 million openings in July.
The report also showed a decline in the quits rate, which is closely watched by economists as elevated quits are seen as a sign of confidence among workers. In July, the quits rate fell to 2.3%, the lowest since January 2021. The JOLTS report showed 5.8 million hires were made in the month, also the lowest total since January 2021.
This report is in line with other labor data from July, most notably the monthly jobs report, which showed there were 187,000 jobs created last month, the fewest since December 2020.
"Job openings per unemployed person remain above pre-pandemic levels, but this indicator is clearly on a downward trajectory amid cooling labor demand growth and impressive labor supply growth," Wells Fargo Economics senior economist Sarah House wrote on Tuesday. "A normalizing quit rate suggests that the fight over workers is subsiding, at least at the aggregate level."
Tuesday's data will also likely come as a welcome sign for the Federal Reserve.
Last week, Fed Chair Jerome Powell described the labor market's rebalancing as "incomplete." Powell has repeatedly noted that getting inflation back down to the Fed's 2% goal will require "some softening in labor market conditions."
"We expect this labor market rebalancing to continue," Powell said in a speech at the Jackson Hole Economic Symposium. "Evidence that the tightness in the labor market is no longer easing could also call for a monetary policy response."
After a summer run of stronger-than-expected economic data, a consumer confidence reading from The Conference Board also out Tuesday came in below expectations. The Conference Board's Consumer Confidence index came in at a reading of 106.1, down from 114 in July and below the 116 expected by economists.
"Assessments of the present situation dipped in August on receding optimism around employment conditions: fewer consumers said jobs are 'plentiful' and more said jobs are 'hard to get,'" Dana Peterson, chief economist at The Conference Board, said in a release.
Stocks jumped after both data releases on Tuesday morning as investor bets on the Fed holding rates steady at its September meeting jumped from 78% on Monday to 84.5% on Tuesday morning.
Another look at the labor market is expected on Friday with the August jobs expected to show there were 168,000 jobs added to the economy last month with the unemployment rate forecast to remain flat at 3.7%.
Josh is a reporter for Yahoo Finance.
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