Job openings dropped in July as hiring and layoffs held steady

Demand for new workers cooled in July alongside more moderate hiring and historically low levels of layoffs.

Driving the news: The latest Job Openings and Labor Turnover Survey (JOLTS) suggests the ideal labor market rebalancing that Fed policymakers want is underway. Vacancies are easing without a big jump in unemployment.

• But it also suggests that the era of heightened worker power — as indicated by an elevated quits rate — might be near its end.

Details: There were 8.8 million job openings in July, a decrease of 338,000 compared to the prior month. That means there were 1.5 open jobs for every unemployed worker, the lowest ratio since Sept. 2021.

• Meanwhile, the hiring rate ticked down by 0.1% to 3.7%, in step with the pre-pandemic hiring rate.
• The layoff rate held at a low 1% for the fourth straight month.

The intrigue: Remember the Great Resignation? In July, the quits rate was 2.3%, the lowest since January 2021, matching the months before the pandemic.

• The quits rate among private sector workers fell to 2.5%, well below the most recent peak of 3.3% in April 2022.
• The indicator is the latest sign that the COVID-era quitting frenzy looks to be in the past.

The bottom line: "While most Americans who want a job have one, it is not as easy to find new work as a year ago. Hires and quits are back to their pre-pandemic levels, and job openings are falling rapidly," Bill Adams, chief economist at Comerica Bank, wrote in a note.