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June Job Vacancies Fall to 7.4 Million Nationwide

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June Job Vacancies Fall to 7.4 Million Nationwide/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Job openings fell to 7.4 million in June, down from 7.7 million the previous month, signaling continued labor market softening. Fewer workers are quitting, reflecting waning confidence amid economic uncertainty. Economists link the slowdown to past Fed rate hikes and ongoing trade tensions under President Trump.

June Job Vacancies Fall to 7.4 Million Nationwide

U.S. Labor Market Cooling + Quick Looks

  • Job openings dropped to 7.4 million in June, down from 7.7 million in May
  • Quits rate declined, suggesting workers feel less confident seeking new roles
  • Layoffs remained steady, indicating employers are cautious but not slashing staff
  • Private sector hiring weakest since October 2024, adding just 74,000 jobs
  • Public education hiring possibly inflated, with 64,000 state/local education jobs added
  • Fed’s 2022–2023 rate hikes still impacting hiring decisions
  • Trump’s trade policies creating hiring uncertainty, especially in manufacturing
  • Economists project July unemployment to rise to 4.2%
  • Monthly job gains averaging 130,000 in 2025, down from 168,000 in 2024
  • Sharp contrast with post-pandemic recovery pace, which averaged 400,000 jobs/month

Deep Look: U.S. Job Market Slows Further as Openings Shrink to 7.4 Million in June

WASHINGTON (AP) — The once-hot U.S. labor market is showing clearer signs of cooling, with the number of job openings falling to 7.4 million in June, down from 7.7 million in May, the Labor Department reported Tuesday. The latest numbers highlight a gradual but persistent slowdown in job creation as businesses navigate the ripple effects of Federal Reserve interest rate hikes and trade uncertainty under President Donald Trump.

The monthly Job Openings and Labor Turnover Survey (JOLTS) revealed more than just a drop in vacancies. Fewer workers are quitting their jobs, signaling lower confidence in the ability to find better opportunities. While layoffs remained stable, the decline in voluntary quits is often viewed as an early indicator that employees see fewer appealing options in the job market.

Labor Market Faces Drag From Policy and Inflation

Much of the slowdown in hiring traces back to the Fed’s aggressive response to surging inflation during 2022 and 2023. The central bank implemented 11 consecutive rate hikes, bringing borrowing costs to their highest levels in decades. These moves helped tame inflation but also cooled investment and hiring, particularly in interest-sensitive sectors like construction and manufacturing.

Compounding the effect is uncertainty over Trump’s tariffs and trade strategy, which economists say is making business leaders hesitant to expand payrolls. Ongoing tariff negotiations with China, the European Union, and other nations have complicated the hiring calculus, especially for manufacturers and exporters.

“Companies are delaying decisions due to volatility in trade policy,” said economist Julia Rasmussen of Brookings. “Even those with strong balance sheets are reluctant to scale up hiring without clarity.”

Job Creation Slows, Confidence Slips

According to a FactSet survey, Friday’s upcoming July employment report is expected to show that U.S. employers added 115,000 jobs, down from 147,000 in June. If confirmed, this would continue a trend of deceleration in job growth, which is averaging 130,000 new jobs per month in 2025, compared to 168,000 in 2024, and a robust 400,000 per month from 2021 to 2023 during the post-pandemic recovery.

June’s seemingly strong hiring figures were deceptive. Private sector job growth was only 74,000, the weakest since October 2024, when hurricanes interrupted construction and retail employment. Nearly 64,000 of June’s new jobs came from state and local government education roles, which analysts believe may be distorted by end-of-school-year seasonal adjustments.

This softening in labor force data adds pressure to policymakers, particularly with inflation showing signs of rising again and tariff-related price increases looming.

Unemployment Rate to Tick Higher?

Economists expect the unemployment rate to rise slightly to 4.2% in July, from 4.1% in June. Though still historically low, any upward movement in joblessness tends to shake investor confidence and can influence Federal Reserve decisions on whether to delay or accelerate interest rate cuts later in the year.

Fed Chair Jerome Powell has signaled the central bank will remain “actively patient,” suggesting that while the Fed is aware of the slowdown, it wants to see more data before adjusting rates. Fed officials also remain wary of tariff-induced inflation, another potential brake on future hiring.

“The labor market is bending but not breaking,” said Nela Richardson, chief economist at ADP. “The real risk is if consumer spending cools and job creation drops below 100,000 — then we’re in trouble.”

America’s Workforce in Flux

Beyond the numbers, the shift in momentum represents a psychological change among both workers and employers. The period of “Great Resignation” and widespread job switching has cooled significantly. Workers are staying put, and companies are hiring more selectively, often relying on automation, restructuring, or temporary labor instead of new full-time hires.

President Trump has praised the low unemployment rate as proof of economic strength but has blamed the Fed for “dragging its feet” on rate cuts. Critics argue his tariff policy and federal spending cuts have done just as much to shake employer confidence.

Looking ahead, much will depend on how aggressively the Fed and White House respond to the cooling job market — and whether U.S.-China tariff talks produce progress before the August 12 deadline.


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