Job Market Keeps Humming, But Shows Signs of Cooling

The big picture

In today’s Job Openings and Labor Turnover Report, released by the U.S. Bureau of Labor Statistics, hires remained extremely high at 6.4 million, quits remained extremely high at 4.2 million, and layoffs remained extremely low at 1.3 million. But job openings dropped to 10.7 million, falling below 11 million for the first time in 7 months, an indication that the labor market could slacken and hiring slow down in the coming months. 

The decline in openings is to be expected given the degree of economic uncertainty and the recent deterioration in financial conditions, following the Federal Reserve’s interest rate hikes. So far, however, the decline has been relatively modest, with the number of job openings still 53% higher than before the pandemic. Hires and openings are holding steady in leisure and hospitality, the sector that still has the largest number of jobs missing since the pandemic, but which has recently enjoyed an increase in activity. 

Where the market is slackening first

Hiring has already started slowing in real estate and rental and leasing (-18%), wholesale trade (-10%), and professional and business services (-8%); and falling openings in retail trade (-29%), construction (-18%), state and local government education (-17%), and health care and social assistance (-15%) suggest those industries could see some softening in demand as well.  

Job openings slowed down for all businesses in all size classes, other than major enterprises (those with more than 5,000 employees), which saw openings grow 14%.

The most significant slowdown in job openings occurred in mid-size businesses with 250-999 employees, which saw openings decrease by 10%. Large companies with 1000-4999 employees have already applied the brakes in hiring, with 27% fewer new hires in June than the prior month—the biggest decrease in hires across all company size classes.

Written by

Julia Pollak is Chief Economist at ZipRecruiter. She leads ZipRecruiter's economic research team, which provides insights and analysis on current labor market trends and the future of work.

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