U.S. Job Openings Miss Forecasts in July JOLTS Report

Openings rise but fall short of expectations

U.S. job openings increased by 89,000 to 7.271 million by the last day of July, the Bureau of Labor Statistics reported on September 1 in its Job Openings and Labor Turnover Survey. Economists polled by Reuters had forecast 7.300 million unfilled positions. Data for June was revised lower to 7.182 million from the previously reported 7.359 million, meaning the level of labor demand was weaker than initially thought even before July's modest increase.

The job openings rate rose to 4.4% from 4.3% in June. Unfilled positions in manufacturing increased by 79,000 in July, nearly all in durable goods industries, while professional and business services added 65,000 openings. The manufacturing surge was notable given broader concerns about industrial activity, though analysts cautioned that single-month sector moves can be volatile.

Hiring weakness offsets the openings gain

The more concerning signal in the report was on the hiring side. Hiring dropped by 278,000 to 5.054 million in July, led by a decline of 188,000 in professional and business services. The hires rate fell to 3.2% from 3.4% in June. The gap between openings and hires suggests employers are posting positions but not filling them at the pace implied by the vacancy count—a pattern consistent with a labour market that is stable rather than expanding.

Layoffs and discharges decreased by 119,000 to 1.666 million, with the rate easing to 1.0% from 1.1%. Historically low layoffs have been the primary driver of net employment gains this year, meaning job growth has depended more on employers retaining workers than on aggressive hiring.

Survey reliability and the Fed's dilemma

The response rate to the JOLTS survey has dropped to just above 30% from around 58% before the COVID-19 pandemic, leading some economists to caution against placing too much emphasis on the report when gauging labour market health. Nonetheless, the combination of below-forecast openings and declining hiring complicates the Federal Reserve's September decision.

Fed Chair Kevin Warsh has emphasised that inflation remains above target, pushing markets toward pricing a rate hike. But weak hiring and a miss on job openings support the case for patience. The committee must weigh a 3.3% core PCE reading against labour market data that shows stability rather than overheating—a mixed picture that makes the September 15–16 meeting genuinely uncertain.

August payrolls report up next

A Reuters survey of economists expects nonfarm payrolls to have rebounded in August after a surprise decline in July. The government will publish the closely watched employment report on Friday, September 5. That release, rather than JOLTS, is the data point most likely to shift rate expectations in the days before the FOMC meeting.

For businesses, the JOLTS report confirms that finding qualified workers remains possible but that the pace of labour market expansion has slowed. Wage pressures may ease if hiring continues to lag openings, but the report alone is unlikely to settle the inflation-versus-employment debate that defines the current policy environment.