US job vacancies at lowest level since 2021 as consumer confidence dips

US job openings fell to their lowest level in two years last month in a further sign the labour market is cooling, which could lead the Federal Reserve to pause its interest rate increases again next month.

The number of positions available fell to 8.8 million in July, down from 9.17 million the previous month, data released by the Labour Department on Tuesday showed. It is the lowest level of job vacancies since 2021.

The decline in total vacancies reflects dips in positions available in business services, health care and government services.

The quit rate changed little at 2.3 per cent, indicating that jobseekers are less confident about finding another position. The number of layoffs also changed little, at 1.6 million.

There are currently 1.5 positions available for every jobseeker, down from a peak of a near two-to-one ratio last year.

Tuesday’s report from the Labour Department appears to reflect a separate report that showed a dip in consumer confidence.

It declined this month to 106.1 from a downwardly revised 114.0 in July due to still-elevated prices and less-optimistic views on the jobs market, the Conference Board reported.

“Consumers were once again preoccupied with rising prices in general and for groceries and gasoline in particular,” said Dana Peterson, the board’s chief economist.

And according to the survey, 14.1 per cent of consumers said jobs were “hard to get”, up from 11.3 per cent last month. Meanwhile, the number of consumers who found jobs to be “plentiful” declined.

Assessments of the present situation dipped this month after receding optimism around employment conditions: fewer consumers said jobs were “plentiful” and more found them “hard to get.”

Tuesday’s reports are likely to be welcomed by the Federal Reserve, which has been looking forward to a cooling labour market in its bid to tamp down on inflation. It also adds to growing expectations that the Fed will skip an interest-rate increase when it meets next month.

Traders anticipate the target range of 5.25 and 5.5 per cent will be unchanged following the Fed’s meeting on September 19 and 20.

Speaking at the Jackson Hole symposium last week, Fed chairman Jerome Powell said the central bank would “proceed carefully” and take a data-driven approach in its upcoming interest rate decisions.

The Labour Department and Consumer Confidence reports come ahead of the Prince Consumption Expenditures Index and unemployment reports later this week.

Updated: August 29, 2023, 4:45 PM

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