NewsUSAThe decline in job offers cools the US labor market for the first time in seven months

The decline in job offers cools the US labor market for the first time in seven months

Part-time job offer at a Los Angeles location in February.FREDERIC J. BROWN (AFP)

A report from the Department of Labor published this Tuesday has provided a small respite after months of heating in the economy. The number of job openings in the US fell 5.4% in June, a sign according to experts that the labor market is cooling due to weakening demand. For the first time in seven months, offers fall below eleven million, standing on the last day of June at 10.7 million vacancies, well below the 11.3 million offered in May, according to data from the Statistics Office federal. The unemployment rate remains stable at 3.6%.

June’s vacancy figure is high by historical standards, but it also represents a sharp drop from the record 11.9 million openings in March. It was also the largest monthly decrease since these data began to be recorded two decades ago, not counting the two-month drop at the start of the pandemic in 2020.

The drop is concentrated in retail, a further sign that the sector is experiencing growing difficulties – such as the accumulation of inventories by companies – as consumers shift their spending from goods to services. But job openings have also dwindled in the leisure and restaurant sector, hit hardest by labor shortages last year as the recovery took off.

The labor market remains strong by most indicators. In June there were still nearly twice as many job openings as there were unemployed, and employers continue to raise wages and offer other incentives to attract and retain staff. Layoffs remained near an all-time low, suggesting employers are reluctant to dump their hard-earned staff. The number of workers voluntarily quitting their jobs remains high, although it has fallen from last year’s peak.

A lower demand for labor could translate into a lower increase in wages, which have risen steadily in recent months, a factor that has contributed to accelerating inflation. Analysts expect another key data, this Friday, on the salary increase. Analysts’ estimate points to a decline in hourly earnings of 0.2 percentage point to 4.9%.

American employers have been experiencing a notable labor shortage for the past year and a half. Encouraged by the vigorous recovery from the pandemic -GDP grew by 6% last year in the country-, workers take advantage of the competition to obtain better salary or hourly conditions, as well as advantages in health or pension coverage. This disproportion between supply and demand explains the phenomenon known as the Great Resignation or Great Resignation, which in June registered 4.2 million dropouts, a figure close to the record of November, when 4.5 million Americans of working age resigned from their jobs. of work.

The number of layoffs, 1.3 million in June, remains very low compared to the level recorded before the pandemic, between 1.7 and 1.9 million a month.

With inflation at record highs (9.1% in June, with core inflation at 5.9%, well above the Fed’s 2% target), the slowdown in the labor market, which would otherwise raise more concern What a relief, it is seen today as a necessary condition for prices to stop rising. According to most analysts, the employment figures for July, which will be released this Friday, should show signs of improvement in labor market conditions, that is, a market less stressed than in recent months due to the disproportion between supply and demand and due to the continuous salary increase.

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