In June, there were significantly fewer job postings in the United States as a result of the Federal Reserve raising interest rates, record-high gas costs, soaring inflation, and a slowdown in consumer spending growth.
On the final working day of June, there were 10.7 million job advertisements in the U.S. Down from an upwardly revised 11.3 million a month earlier, the Bureau of Labor Statistics reported on Tuesday.
In the June release of the government’s Job Openings and Labor Turnover Survey, or JOLTS, economists had anticipated 11.1 million new positions. The steeper fall than anticipated in demand for labor is indicated by the greater decline than forecast.
Takeaways from today's #JOLTS report:— Julia Pollak (@juliaonjobs) August 2, 2022
1. The labor market remained remarkably resilient in June with extremely high hires & quits, and extremely low layoffs.
2. Declining job openings point to slackening labor market conditions, with hires & turnover soon ticking ⬇️ pic.twitter.com/FTzYp9UUML
By hiking interest rates, the Federal Reserve has been attempting to calm the labor market. The Federal Reserve increased its target interest rate by 0.75 basis points in mid-June, the most since 1994. Reduced demand for labor might result from slower corporate growth caused by tighter financial circumstances. Jerome Powell, the chairman of the Fed, has stated that he would welcome a drop in job openings as evidence that the Fed’s initiatives to control inflation are bearing fruit.
Openings fell significantly in the construction and retail sectors, two industries that have recently displayed indications of easing. Prior to accounting for inflation, consumer spending increased by 1.1 percent in June, according to a count of these expenditures issued last week by the Commerce Department. Real spending only increased by 0.4 percent after accounting for inflation, largely due to increasing food and grocery prices. Inflation-adjusted spending on luxuries products and services probably decreased.
According to the government, hiring rates decreased for major companies with more than a thousand employees. This shows that firms are holding off on hiring new personnel in anticipation of an economic collapse.
Construction job postings decreased by 17 percent, from 405,000 to 334,000. The government said on Monday that June construction spending decreased by 1.1 percent. Construction spending on single-family houses, a market that is particularly vulnerable to interest rate rises, decreased by 3.1%. Construction employment fell from 359,000 to 346,000. The number of resignations decreased from 230,000, or 3.0 percent, to 179,000, or 2.3 percent. Real estate job openings decreased from 154,000 to 132,000.
Opportunities in the fields of education, health care, information technology, and finance and insurance increased considerably.
Openings in the federal government decreased from 121,000 to 85,000. As job advertisements for positions at schools decreased from 362,000 to 300,000, state and local opportunities fell from 907,000 to 847,000. 200,000 people were hired in schools, up from 188,000 a month before.