Job openings continued to point to strong labor demand, staying above forecast at 8.18 million in June. May’s number was also revised up to 8.23 million, according to Bureau of Labor Statistics data released on Tuesday.
The data supported our forecast of another strong month of job gains in July when the data is released on Friday. We forecast a net gain of 200,000 jobs, while the unemployment rate is likely to inch down to 4.0%.
The upside surprise in the job openings data was driven mostly by the seasonal components like trade, transportation, utilities, and leisure and hospitality, accounting for more than 250,000 net openings.
Those are the sectors that we have expected to add the most risk to our forecast because of their summer seasonal volatility, a key reason why our forecast is higher than the median consensus.
Looking more into the job openings report, we see strength in the data, with layoffs falling to the lowest level since 2022 job quits reaching the lowest point since 2021.
Read more of RSM’s insights on the economy and the middle market.
Both measures were further evidence supporting our call that we are closer to a soft landing and not a recession.
Consumer confidence
In another report on Tuesday, consumer confidence data edged up on the month, rising to 100.3, up from 97.8 in June, according to the Conference Board. With inflation down, job vacancies above the pre-pandemic level, layoffs at a multiyear low, and gasoline prices low and stable, there were not a lot of reasons for consumers to feel worse in July.
That said, we expect the Federal Reserve to act sooner rather than later to keep the economic wheel rolling as signs of slowing are mounting. Many economists and analysts have changed their forecasts to call for a rate cut at the Fed’s meeting this week as we have done for many months now.
We continue to believe that a rate cut at this week’s meeting is a great opportunity for the Federal Reserve to boost economic growth. But more likely than not, we won’t see that reduction until September.
