Investing.com -- U.S. job openings dropped to their lowest level in more than two years in July, but remain relatively elevated, potentially prompting Federal Reserve officials to keep interest rates higher for longer to help loosen a tight labor market.
Highlighting the resilient market conditions, layoffs were little changed at 1.6 million during the month, suggesting that employers are continuing to hold on to workers following troubles finding labor during the pandemic.
According to data from the Bureau of Labor Statistics, the number of quits dropped by 253,000 to 3.5M, a signal that employees may be becoming slightly less confident in their ability to quickly switch jobs in an uncertain economic environment. Over time, this trend could weigh on wage growth and, by extension, inflation -- a potential boon for Fed policymakers keen on corralling price gains.
A total of 8.8M job openings were recorded on the last business day of July, according to the Job Openings and Labor Turnover Survey, or JOLTS report. The measure of labor market demand, which dipped by 338,000 from the prior month, was the lowest since March 2021. Economists had predicted the figure would come in at just under 9.5M.
Meanwhile, the job openings rate edged down marginally to 5.3%.
The JOLTS report comes as a prelude to the much anticipated publication of key U.S. nonfarm payroll figures later this week. The labor market has been a major focus of the Federal Reserve's recent cycle of rate increases, with policymakers hoping that a cooling in demand for workers will help ease inflationary pressures.