September 28, 2023

The number of job openings in the United States rose in July after three months of declines, a sign that employers are urgently seeking workers despite slowing economic growth and high inflation.

There were 11.2 million open jobs available on the last day of July, up from 11 million in June. That averages out to nearly two open jobs for every unemployed person.

Before the pandemic, openings never exceeded 8 million a month.

The quits rate declined somewhat, while layoffs also remained near historic lows. In the accommodation and food services, layoffs hit a record low, with just 88,000 workers discharged in July — about 60% of the pre-pandemic level.

“Hospitality companies tell us that what was once a ‘one strike, you’re out’ rule for employees who failed to show up at work without notice is now more like a ’10 strikes, you’re out’ rule,” Julia Pollak, chief economist at ZipRecruiter, said in a note. “They cannot afford to fire workers because they cannot afford to replace them.” 

Layoffs also hit record lows for small businesses, defined as those with 10 to 49 workers.

“In an extremely tight labor market where businesses are struggling to attract candidates, employers are holding onto the workers they’ve got, despite rising recession risks and business uncertainty,” Pollak said.

Tuesday’s figures, while excellent news for job seekers, will be a disappointment for Federal Reserve officials, who are seeking to cool the job market by raising short-term interest rates to try to slow borrowing and spending, which tend to fuel inflation.

Fed Chair Jerome Powell and other policymakers have said they hope to reduce the number of open jobs without causing higher unemployment. But many economists argue that such an outcome is unlikely — and indeed, the Fed’s own projections show the unemployment rate rising later this year.

The latest figures, however, suggest that demand for workers remains hot. On Friday, the government will release its monthly jobs report, which is expected to show that 300,000 jobs were added — a slowdown from the previous month when hiring topped a half-million, but still a healthy number.

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