U.S. job openings drop sharply in June amid cooling labor market

WASHINGTON, Aug. 2 (Xinhua) -- The number of job openings fell sharply by 605,000 to 10.7 million by the end of June, indicating weaker labor market demand as Federal Reserve raises interest rates, the U.S. Labor Department reported Tuesday.

The largest decreases in job openings were in retail trade, wholesale trade, and in state and local government education, with a decline of 343,000, 82,000 and 62,000, respectively, according to a report by the department's Bureau of Labor Statistics.

The June unemployment report, which was released early July, showed that the number of unemployed slightly fell to 5.9 million. Even with the sharp decline in job openings, there were still approximately 1.8 job positions per available worker.

Weekly initial jobless claims in the United States have been rising since April and are hovering near the highest level since November, another sign that the labor market might be cooling. The figure slightly decreased to reach 256,000 in the week ending July 23.

Fed officials watch the labor market data closely as they continue the aggressive rate-hike path to fight surging inflation. Fed Chair Jerome Powell said last week that the process to bring down inflation would likely involve a period of below-trend economic growth and "some softening in labor market conditions."

"But such outcomes are likely necessary to restore price stability and to set the stage for achieving maximum employment and stable prices over the longer-run," said Powell.

U.S. employers added 372,000 jobs in June, with the unemployment rate remaining at 3.6 percent, just slightly above the pre-pandemic level.

Former U.S. Treasury Secretary Lawrence Summers, who warned of inflation risks in February 2021, said recently the U.S. jobless rate would need to rise above 5 percent for a sustained period in order to bring inflation down.