Job opportunities plummet as employers withdraw from hiring

The number of job openings in the US fell sharply in June as the Federal Reserve raised interest rates, gas prices hit record highs, inflation soared, and consumer spending growth slowed. .

There were 10.7 million job openings on the last business day of June, the U.S. Bureau of Labor Statistics said Tuesday, down from 11.3 million revised up a month earlier.

Economists expected 11.1 million jobs in the June report on the Job Openings and Labor Turnover Survey, or JOLTS. The steeper-than-expected decline indicates that labor demand has plummeted faster than economists predicted.

The Federal Reserve tried to cool the job market by raising interest rates. In mid-June, the Fed raised its interest rate target by 0.75 basis points, the largest increase since 1994. Tighter financial conditions may slow business expansion by lowering demand for workers. Fed Chairman Jerome Powell said he would welcome a decline in job vacancies as a sign that the Fed’s efforts to tame inflation are working.

Openings are down sharply in both the retail and construction sectors, two areas that have shown signs of slowing down in recent months. Consumer spending rose 1.1% in June before adjusting for inflation, according to the consumer spending bill released last week by the Commerce Department. Real spending, after correcting for inflation, only increased by 0.4%, and much of that increase reflects the rise in food and grocery prices. Spending on discretionary goods and services has likely declined in inflation-adjusted terms.

Hiring rates have declined in large companies with more than a thousand employees, the government said. This suggests that companies are preparing for an economic downturn by withdrawing from hiring new employees.

The number of openings hit a March record of 11.7 million. The ratio of open jobs to unemployed, which economists see as a sign of labor market rigidity, hit a record of nearly two to one in March. It has slowed in each subsequent month, although falling unemployment has mitigated some of the effect of the lower openings. The drop in openings in June was somewhat offset by the drop in unemployment, taking that ratio from nearly 1.9 in May to 1.8. This indicates that the labor market remains extremely rigid by historical standards.

The reduction in job openings came from the withdrawal of employers. The hiring was little changed at 6.4 million. Resignations also remained stable at 4.2 million. The dropout rate remained unchanged at 2.8%.

The layoffs were hardly changed at 1.3 million. The layoff rate remained stable at 0.9%.

Retail store openings dropped significantly from 1,185 million to 842,000, a drop of nearly 29%. Hires rose to 803,000 from 791,000. This suggests a significant drop in hiring among retailers.

Job advertisements from manufacturers fell from 816,000 in May to 790,000. Hiring went from 468,000 to 475,000. Openings in the production of durable goods went from 505,000 to 510,000 but hires decreased from 249,000 to 242,000. At the end of June, non-durable goods producers were looking for 280,000 workers, down from 311,000. Hiring increased to 233,000 from 219,000.

Openings in leisure and hospitality fell from 1,542 million to 1,451 million, with a sharp decline of 5.9 percent. In the hospitality and catering sector, openings increased from 1,385 to 1,304. Hiring in leisure and hospitality increased from 1,148 million, with restaurants and hotels rising to 1,004 million from 976,000.

The housing and restaurant services sector has the highest resignation rate, but in June it fell to 5.7% from 5.9%. In February, the dropout rate reached 6.1%. Resignations are interpreted as a sign of workers’ confidence and strength in the labor market as workers typically leave their jobs voluntarily when they expect to find a new position easily.

Job opportunities in construction fell from 405,000 to 334,000, a drop of 17%. On Monday, the government reported that construction spending fell 1.1% in June. Spending on building single-family homes, an industry particularly sensitive to interest rate hikes, fell 3.1 percent. Construction hires fell to 346,000 from 359,000. Resignations fell from 230,000, or 3.0 percent, to 179,000, a rate of 2.3 percent. Openings in the real estate sector fell to 132,000 from 154,000.

Openings increased slightly in finance and insurance, education, health care and information technology.

Federal government openings dropped from 121,000 to 85,000. State and local openings fell from 907,000 to 847,000 while ads for positions in schools fell from 362,000 to 300,000. Hiring in schools jumped to 200,000 from 188,000 a month earlier.

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