America’s Job Market Hits ‘Turning Point’ as Openings Fall Below Unemployment
July job openings fall to 7.18 million while unemployment climbs to 7.2 million.
For the first time in more than four years, the number of job openings in the American labor market has fallen below the number of unemployed — a significant shift that may signal the end of the post-pandemic hiring boom.
The Job Openings and Labor Turnover Survey, released Wednesday, showed that job openings in July dropped to 7.18 million, below consensus estimates and representing the lowest figure in 10 months. The number of unemployed Americans, meanwhile, climbed to 7.2 million.
The Federal Reserve closely monitors the ratio of vacancies to the number of unemployed as a key indicator of the balance between labor demand and supply.
An ideal labor market typically features more job openings than unemployed Americans — a situation known as a “tight” labor market — which provides potential employees with greater job opportunities and bargaining power while still enabling employers to fill positions. When the ratio reverses, it often signals broader economic weakness or structural challenges in the job market.
The July labor market figures produce a ratio of 0.99 jobs for every unemployed American, pushing the ratio below 1.0 for the first time since April 2021, when the economy was disrupted by the Covid-19 pandemic. At one point in 2022, the ratio reached as high as two to one.
“This is yet another crack in the labor market that illustrates how much harder it is to get a new job right now than what we’ve seen in a long time,” the chief economist at Navy Federal Credit Union, Heather Long, wrote on Wednesday. She described the current situation as a “turning point.”
At the same time, though, layoffs and hiring remained steady. Taken together, the data indicate a labor market that is weakening but not collapsing and reinforce expectations that the Federal Reserve will cut interest rates later this month.
Economists will be closely watching an unemployment report scheduled for release by the Bureau of Labor Statistics on Friday. This dataset will be the first released by the BLS since President Trump dismissed Erika McEntarfer, a commissioner whom he accused of manipulating jobs data during the 2024 election to benefit Vice President Kamala Harris.
