US Labor Market Shows Signs of Cooling as Job Openings Drop

The U.S. labor market maintained stability in June, though signals of cooling are emerging amid shifting sectoral dynamics.

The latest Jobs Openings and Labor Turnover Survey (JOLTS) reported job openings at 7.4 million for June, a decrease of about 275,000 from May and steady year-over-year. The job openings rate slipped to 4.4%, down from 4.6% the previous month.

Several major industries registered significant declines in available positions. Accommodation and food services saw job openings drop by 308,000, while healthcare and social assistance fell by 244,000 and finance and insurance posted a 142,000 decrease. Manufacturing added 14,000 openings overall, but this was tempered by a 35,000 reduction in durable goods manufacturing. The retail trade sector bucked the broader trend, gaining 190,000 job openings.

Private sector job openings fell by 325,000 from May, with the private openings rate declining to 4.6% from 4.8% in May. Hiring activity also eased, down by 261,000 to 5.2 million jobs — the lowest level over the past twelve months and the second lowest since the onset of the pandemic.

Number of Hires

Professional and business services experienced the largest decline in hires, losing 133,000 positions. Accommodation and food services followed with 106,000 fewer hires, and arts, entertainment and recreation dropped by 42,000. Contrasting these trends, retail trade added 32,000 hires compared to May, while healthcare and social assistance increased by 29,000, and transportation, warehousing, and utilities rose by 23,000.

Businesses with 50 to 249 employees saw the largest decrease in openings, down 355,000 compared to May. Hiring also slowed, falling by 246,000 to 4.9 million, with the steepest declines again among firms with 50 to 249 employees and those with 250 to 999 employees.

Total separations decreased slightly by 76,000, driven mainly by a drop in quits, which fell by 102,000 to 3 million. However, layoffs and discharges edged up by 22,000, notably increasing among the smallest establishments (one to nine employees), while falling in most other size classes. These shifts suggest a modest cooling in labor demand, especially among mid-sized firms, and a more cautious hiring approach across business sizes.