The number of unemployed Americans is now higher than the number of job openings for the first time since 2021, according to a new government report.
In its Job Openings and Labor Turnover Survey released on Wednesday, the Bureau of Labor Statistics reported 7.24 million job applicants and 7.18 million available job positions. The number of job openings is below economic forecasts, which estimated there would be 7.38 million vacancies. Compared to July, the number of open jobs in June was 7.4 million.
The ratio of job openings to unemployed people fell to 0.99 in July, the lowest since 0.96 in April 2021.
“The July JOLTS report showed further signs of softening labor market conditions,” wrote Nancy Vanden Houten, lead economist at Oxford Economics, according to the Hill. “The job openings-to-unemployed ratio fell below 1.0 for the first time since April 2021, signaling a loosening demand for workers.”
Meanwhile, the BLS said the number of new hires remained “unchanged” at 5.3 million, and the number of workers quitting their jobs remained steady at 3.2 million.
University of New Haven economics professor Brian Marks argues that while the higher number of unemployed individuals compared to that of open jobs is not particularly “uncommon,” it does put pressure on the Federal Reserve as it considers lowering interest rates.
“This news could be construed as further complicating matters for the Federal Reserve as it suggests less wage–price pressure while its preferred inflation measure is higher than it prefers,” he told the Washington Examiner. “While the Fed will have this and other rear-view looking data, it must assess potential trends in order to determine whether it is time to lower rates.”
The latest data follows a disappointing jobs report that found only 73,000 jobs were added in July, down from expectations of 108,000 new jobs. The number fell below a benchmark in which the United States economy needs to add between 80,000 and 100,000 jobs per month to keep pace with population growth.
The jobs report for August is set to be released on Friday. It will be the first jobs report since President Donald Trump fired the former BLS commissioner for overseeing the dour employment report.
“Another data point suggesting a softer economy is Friday’s labor report where it is estimated that unemployment is expected to increase, albeit slightly,” Marks said.
In the meantime, it’s expected that the nation’s unemployment situation will only get worse.
“We officially have more unemployed Americans than available jobs,” Spencer Hakimian, founder of a New York hedge fund, wrote on X. “Expect the unemployment rate to rapidly rise from here on out.”
The unemployment rate was 4.2% in July, remaining virtually unchanged from the previous month. It has been around 4% since May 2024.
As the Federal Reserve looks toward possibly cutting interest rates as Trump requested, Chairman Jerome Powell addressed the “unusual” decrease in both workers and jobs.
“While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers,” he said last month at the Fed’s annual summit in Jackson Hole, Wyoming. “This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.”
ECONOMY ADDED JUST 73,000 JOBS IN JULY: THE KEY FACTS AND FIGURES
Marks said Powell “has signaled that a potential rate cut is forthcoming at its next meeting in 12 days,” referring to the Federal Open Market Committee’s two-day meeting starting Sept. 16.
The next JOLTS report is scheduled for a Sept. 30 release.
