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By Rachel Dobkin
Weekend Reporter
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Fewer companies are now seeking to hire workers, a new Labor Department report found.
In July, there were 7.7 million jobs open, which is down from the 7.9 million open jobs in June, according to the Labor Department report released on Wednesday. Meanwhile, the number of hires increased from June to July—5.2 million to 5.5 million. The job opening rate was at 4.6 percent in July. While job openings did decrease last month, the Labor Department noted that this was a "little" change.
Job sectors in which the number of openings decreased were health care and social assistance (187,000 less job openings); state and local government, which does not include education (101,000 less job openings); and transportation, warehousing and utilities (88,000 less job openings).
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Meanwhile, job openings increased in professional and business services (178,000 more openings) and in the federal government (28,000 more openings).
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The Biden administration has touted the exponential job growth in the United States in recent years after millions of Americans lost their jobs during the COVID-19 pandemic.
In June 2020, about 17.75 million Americans were unemployed, according to the U.S. Bureau of Labor Statistics (BLS). This past July, 1.5 million Americans were experiencing long-term unemployment, meaning they have been jobless for 27 weeks or more, according to the BLS. The unemployment rate slightly rose in July by 0.2 percentage points to 4.3 percent.
However, over the past year, job openings have been gradually decreasing.
"The cooling in labor market conditions is unmistakable," Jerome Powell, chair of the Federal Reserve, said in a speech at an annual economic symposium in Wyoming on August 23. "Job gains remain solid but have slowed this year...We do not seek or welcome further cooling in labor market conditions."
Meanwhile, the Fed is expected to cut its benchmark interest rate by a modest quarter-point during its mid-September meeting. However, if hiring decreases, the Fed might cut its rate by a relatively aggressive half-percentage point.
The federal funds rate is the target interest rate range at which banks borrow and lend their excess reserves to each other overnight. If the federal funds rate decreases, it can cause inflation to decrease because short-term interest rates are lower, which increases the supply of money and makes it cheaper to get credit.
Additionally, when the Fed cuts its rate, stocks typically increase because the borrowing costs for public companies should fall, making it cheaper for the companies to increase their earnings.
This article includes reporting from The Associated Press.
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