The dog days of summer are coming to an end, and the labor market is already experiencing a frost.
Employers reported a decline in job openings in July, while all other turnover including hiring and separations stagnated from June, according to Wednesday’s job openings and labor turnover survey (JOLTS) data from the Bureau of Labor Statistics (BLS). Let’s take a closer look.
Diving into the data. Employers reported 7.2 million job openings in July, down from 7.4 million in June. Meanwhile, organizations made 5.3 million hires, and saw 3.2 million quits and 1.8 million layoffs and discharges in July, all unchanged from June.
“Employer cautiousness continues,” Rajesh Namboothiry, SVP at Manpower US, told HR Brew. “They’re not hiring, but they’re not firing either.”
Additionally, the ratio of job openings per unemployed person edged up slightly to 1 in July, which Namboothiry said is a bad sign for job seekers. “It is getting tough for job seekers,” he said, adding, “We know that from data, we know that from talking to our talent, that it is getting tougher for them to find jobs. There are less jobs and more job seekers.”
Healthcare and social assistance reported the steepest drop in job openings (a trend supported by private sector research), declining by 181,000 between June and July, followed by retail trade and arts, entertainment, and recreation, which fell by 110,000 and 62,000, respectively.
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In professional and business services, quits increased by 197,000, the largest spike of any industry, while layoffs fell by 130,000. Meanwhile, quits declined the most in construction (down by 80,000), transportation, warehousing, and utilities, and accommodation and food services (both down by 49,000).
Manufacturing was a bright spot in Wednesday’s data, reporting a 41,000 spike in job openings and an increase of 21,000 hires between June and July.
“We have seen that over the last couple of months manufacturing activities have slightly picked up locally,” Namboothiry said. “So that is an indication that we may see some pockets of manufacturing jobs to be added, skilled trade jobs added, which is a positive.”
Zoom out. HR and TA leaders should expect sluggish turnover to continue in the coming months. While expected interest rate cuts from the Federal Reserve later this month could stimulate some business activity and boost hiring, other challenges—including tariffs driving up business costs and declining consumer spending—will likely force businesses to continue their trepidatious approach.
As economic uncertainty festers, businesses will likely continue pursuing short-term talent strategies. Namboothiry said he hasn’t had long-term workforce planning conversations with clients for several months now.
“There was a time when they were looking a year ahead. Now it’s not even a quarter ahead,” Namboothiry said.