US job openings drop unexpectedly in July
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The news: US job openings fell more than expected in July as hiring moderated, signalling an easing of labour market conditions.
The numbers: Job openings dropped 176,000 to 7.181 million by 31 July, from a downwardly revised 7.36 million in June according to the US Labor Department's Bureau of Labor Statistics. Reuters economists had forecast 7.378 million unfilled jobs for the month.
The Job Openings and Labor Turnover Survey (JOLTS) data showed that the pullback in openings was driven in large part by health care, retail trade and leisure and hospitality. Health care vacancies hit its lowest level since 2021.
The pace of hiring slowed, increasing slightly 41,000 to 5.308 million in July. Layoffs rose 12,000 to 1.808 million.
Treasury yields declined on Wednesday on the JOLTS numbers, as the weaker-than-expected data prompted traders to almost fully price in an interest rate cut when the Federal Reserve meets later this month. Bloomberg reported that contracts for predicting Fed moves priced in about 95% of a quarter-point rate cut and increased bets on at least two cuts by year end.
The increase in rate-cut expectations halted a long-maturity selloff in Treasuries that had lifted the 30-year bond’s yield to almost 5%. The two-year note’s yield reached 3.60%, the lowest level since early May.
The context: The decline in vacancies suggests that US firms are reluctant to increase hiring as Trump’s trade policy continues to add uncertainty across the economy. Policymakers on the Federal Reserve are closely monitoring labour market changes ahead of their September meeting.
The sources: Bureau of Labor Statistics, Bloomberg, Reuters
