The US labor market showed signs of cooling in June, with job openings decreasing slightly. According to the Labor Department, there were 8.18 million job vacancies in June, a dip from 8.23 million in May. This decline comes amidst the Federal Reserve’s aggressive efforts to curb inflation through increased interest rates, now at a 23-year high.
Despite the Fed’s actions, the US economy and job market have exhibited remarkable resilience. However, the rising cost of borrowing has started to impact the market. Job openings reached a peak of 12.2 million and have been steadily decreasing since. Nevertheless, with 8.2 million openings, the current number remains strong, surpassing the pre-2021 record of 8 million.
The Fed sees a reduction in job vacancies as a relatively painless way to cool the heated labor market and reduce pressure on companies to raise wages, which could fuel inflation. The Labor Department is scheduled to release July data on job creation and unemployment on Friday.
According to FactSet, a data firm, economists predict the economy added 175,000 jobs in July, a decent figure but a decrease from June’s 206,000. The unemployment rate is projected to remain at a low 4.1%. The Fed is widely expected to maintain current interest rates at its meeting this week, but is likely to begin lowering them at its next gathering in September.
