In July, there was a greater-than-anticipated decline in job openings, indicating a further weakening of the labor market.

In July, the Labor Department reported that job openings reached their lowest level in three and a half years, indicating a slowdown in the labor market.

The number of available job openings decreased by 237,000 to 7.67 million in July, according to the Department's closely monitored Job Openings and Labor Turnover Survey, which is the lowest level since January 2021.

Economists surveyed by Dow Jones had been looking for 8.1 million.

The decline in job openings resulted in a ratio of job openings per available worker of less than 1.1, which is about half of its peak of more than 2 to 1 in early 2022.

The JOLTS report is closely monitored by Fed officials as an indicator of labor market strength, which may support their decision to lower interest rates during their next policy meeting on Sept. 17-18.

Despite a decline in job openings, layoffs increased by 202,000 in July, up from 1.56 million in June. This led to a total of 1.76 million separations, an increase of 336,000 from the previous month. The separations rate as a share of the labor force rose to 3.4%, while hires also increased by 273,000 on the month, putting the rate at 3.5%, or 0.2 percentage point better than June.

The Labor Department will release the nonfarm payrolls count two days before the pivotal August report, which is predicted to show an increase of 161,000 and a decrease in the unemployment rate to 4.2%.