Job openings fall as the U.S. economy shrinks
American employers posted fewer job openings in June as the economy contends with raging inflation and rising interest rates.
Job openings fell to a still-high 10.7 million in June from 11.3 million in May, the Labor Department said Tuesday. In its monthly Job Openings and Labor Turnover Survey, the Labor Department said that the number of Americans quitting their jobs fell slightly in June while layoffs fell.
"This data points to an inflection reached in the number of job openings after 6 months in a row above 11 [million]," Peter Boockvar, chief investment officer with Bleakley Financial Group, said in a report.
The job market has been resilient so far this year: Employers have added an average of 457,000 a jobs a month in 2022; and unemployment is near a 50-year low. That is one reason many economists believe the economy is not yet in a recession even though gross domestic product, the broadest measure of economic output, has contracted for two quarters in a row — one rule of thumb for the onset of a downturn.
Yet some analysts say that job growth alone is an unreliable indicator of a downturn, noting that hiring often remains strong in the early stages of a recession.
For example, in the three months immediately preceding the housing crash-induced recession that started in December 2007, the Labor Department's monthly payrolls survey showed the economy gaining nearly 300,000 jobs per month, Albert Edwards of Societe Generale Cross Asset Research points out in a report.
The Labor Department's jobs report for July, out Friday, is expected to show that employers tacked on another 250,000 jobs last month, which would be a healthy number in normal times but would be the lowest since December 2020. Economists also expect that unemployment stayed at 3.6% for the fifth straight month, according to a survey by the data firm FactSet.
