The latest Job Openings and Labor Turnover Survey (JOLTS) showed that job openings fell slightly to 8.184 million in June, well below the high of 12 million hit in 2022. The hiring rate fell to 3.4%, which is the lowest level in ten years not including COVID, while the quit rate remained a low 2.1%. A low quit rate suggests there is less poaching from other companies and fewer people feel confident about finding new employment.
In addition, the latest week’s reporting showed that the number of unemployment claims that were filed rose to the highest levels of the year. First-time filers as measured by Initial Claims totaled 249,000, while 1.877 million people are continuing to receive benefits after filing their initial claim.
What’s the bottom line? We continue to see more weakness in the labor market, with less hiring, fewer people quitting their jobs, and rising unemployment claims. The Fed will be closely watching upcoming labor sector reports as they weigh monetary policy and the timing for rate cuts this year, given their dual mandate of price stability and maximum employment.