Even though the Federal Reserve raised interest rates significantly to reduce demand, the number of job vacancies in the United States dropped to its lowest level in over two years in June while still being high enough to indicate a tight labor market.
According to the Labor Department’s monthly Job Opportunities and Labor Turnover Survey (JOLTS), the number of job opportunities fell by 34,000 to 9.582 million on the final day of June, the lowest level since April 2021.
There are now 9.616 million available jobs, down from the estimated 9.824 million in May. July’s employment growth 187,000 was barely over the monthly average observed in the decade before the epidemic. The robust employment report comes only days after Fitch Ratings downgraded the United States’ fiscal health. Unemployment fell from 3.6% to 3.5% in July. The unemployment rate has been consistently low for the last 16 months, ranging from 3.5 percent to 3.7 percent, a level not seen in over half a century.
The Federal Reserve has been trying to dampen demand for the last 16 months to reduce inflation that has been building for decades. While the US economy has expanded, key inflation indicators have shown that price rises have slowed dramatically over the last year.
The proportion of unemployed people looking for employment for more than three and a half months hit a year-high of 36.9% in July. According to BLS statistics, the percentage of jobless individuals actively seeking employment for 15 weeks or more has grown to its highest level since November 2020.
Although employment availability is high relative to historical norms, skills, location, and inflation, all provide challenges in the current job market. After a rocky three years, the US employment market is finally stabilizing.
More than twice as many jobs were created as expected in July of 2022. For 31 months in a row, the economy has created jobs, and the average monthly employment increase since the epidemic began is close to 184,000. Consistent salary growth, thanks to the tight job market, has helped boost consumer expenditure. Recent numbers reflect a steadying labor market, with monthly job increases between 150,000 and 180,000. However, some economists argue that a more significant employment market weakness is required to bring inflation down to the Fed’s 2% objective.