By Lucia Mutikani
WASHINGTON (Reuters) - U.S. job openings fell by the most in just over two years in June as demand for workers eased in the retail and wholesale trade industries, but overall the labor market remains tight, allowing the Federal Reserve to continue raising interest rates.
Despite the larger-than-expected decrease in vacancies reported by the Labor Department in its Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday, the jobs market still favors workers. At least 4.2 million workers voluntarily quit their jobs in June and layoffs declined.
Job openings are among several metrics being closely watched by Fed officials. The U.S. central bank has been delivering hefty interest rate hikes in its war against inflation, pushing the economy to the brink of a recession.
"The labor market may be cooling off, but the temperature decline is far from a plunge," said Nick Bunker, director of economic research at Indeed Hiring Lab in Washington. "The outlook for economic growth may not be as rosy as it was a few months ago, but there's no sign of imminent danger in the labor market."
Job openings, a measure of labor demand, were down 605,000 to 10.7 million on the last day of June, the fewest since September 2021, the JOLTS report showed. June's decline was the largest since April 2020, when the economy was reeling from the first wave of the COVID-19 pandemic.
Job openings have been declining since scaling a record high of 11.9 million in March. Still, job openings are nowhere near the low levels seen during the Great Recession 13 years ago.
Economists polled by Reuters had forecast 11.0 million vacancies. The Fed is trying to dampen demand for labor and the overall economy to bring inflation down to its 2% target.
The central bank last week raised its policy rate by another three-quarters of a percentage point. It has now hiked that rate by 225 basis points since March. The economy contracted 1.3% in the first half of the year. Wild swings in inventories and the trade deficit tied to snarled global supply chains have been largely to blame, though overall economic momentum has cooled.
Stocks on Wall Street were mixed. The dollar rose against a basket of currencies. U.S. Treasury prices fell.
NOT RECESSIONARY
Job openings decreased by 343,000 in the retail trade sector. The wholesale trade industry had 82,000 fewer vacancies, while state and local government education reported a reduction of 62,000 in openings. Construction, which is highly sensitive to interest rates, saw job openings decrease by 71,000.