The number of job openings held steady at 8.2 million on the last business day of June, surpassing the estimated 8 million and aligning with upwardly revised May 2024 figures. This data released Tuesday kicks off a week filled with significant labor market indicators.
On Wednesday, ADP will release the July private employment update, followed by the highly anticipated July jobs report Friday.
June Job Openings, Labor Turnover: Key Highlights
In June, job openings remained at 8.2 million, down by 941,000 over the year. Increases were noted in accommodation and food services (+120,000) and state and local government excluding education (+94,000). Conversely, job openings decreased in durable goods manufacturing (-88,000) and the federal government (-62,000).
The number of hires in June was relatively unchanged at 5.3 million but decreased by 554,000 over the year. The hires rate remained steady at 3.4 percent, with May's hire numbers revised down by 101,000 to 5.7 million.
The quits rate also saw little change, with 3.28 million quits in June, down from the revised 3.4 million in May and 3.7 million a year ago.
Jeffrey Roach, chief economist for LPL Financial, said the ratio between job openings and unemployed individuals - a key metric for labor market tightness monitored by Fed Chair Jerome Powell - has normalized.
"If the labor market does soften, we should expect consumer spending to slow, especially for discretionary items. Investors should anticipate the Fed to prepare markets for a rate cut at the September meeting," Roach said.
ADP Data Wednesday, Friday Jobs Report: What Do Analysts Expect?
The analyst consensus as tracked by TradingEconomics calls for the ADP private employment change to remain steady at 150,000 in July, mirroring June's figures.
Nonfarm payrolls, due for release by the Bureau of Labor Statistics on Friday, are expected to decline from 206,000 in June to 175,000 in July. The unemployment rate is anticipated to stay at 4.1%.
Average hourly earnings are forecasted to grow at a 0.3% monthly pace, consistent with June, and at a 3.7% year-over-year rate, down from the previous 3.5%.
Bank Of America Predicts Stronger-Than-Expected Job Numbers
Bank of America economist Michael Gapen projects a surge in nonfarm payrolls to 225,000 in July, marking the highest increase since March.
Private payrolls are expected to total 180,000, while public sector hiring should rise 45,000.
Gapen highlighted the role of two acyclical sectors: government and health care and social assistance, which accounted for nearly three-quarters of jobs added in June.
He expects these sectors to continue driving job growth as employment levels catch up to pre-pandemic trends.
Gapen also warned that Hurricane Beryl's landfall in Texas on July 8 could pose downside risks to the July jobs report.
"The storm caused about 3 million residents and businesses in Texas to lose power. It is conceivable that lack of power prevented part-time and hourly workers from logging hours from July 8-12, rendering them off payrolls during the survey period," he wrote.
Gapen indicated that initial jobless claims in Texas rose by 12,000 on a non-seasonally adjusted basis between July 6 and July 13, suggesting potential storm-related impacts on payroll figures.
Historical data indicates that hurricanes of this magnitude can have notable- albeit temporary - effects on hiring. For instance, Hurricane Harvey's landfall as a Category 4 hurricane Aug. 25, 2017, led to a 41,000 increase in initial claims and a 33,000 decrease in payroll employment in September 2017, down from the 172,000 average pace in the preceding three months.
