Job openings dip in July as demand for workers slows, but high ‘quit rate’ shows labor market still strong

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A mason at work in Connecticut. Job openings in the U.S. fell slightly in July

The numbers: Job openings in the U.S. fell slightly in July to a five-month low in a sign of slackening demand for labor. But layoffs remained extremely low and the number of people quitting hit an all-time high, typically a mark of a strong jobs market.

Read: U.S. creates just 130,000 new jobs in August, keeping Fed on track to cut rates

What happened: Job openings fell among wholesalers and government, offsetting an increase in media and energy-related work such as oil extraction. Lower oil prices have forced drillers to cut back on employment.

The share of people who left jobs on their own, known as the quits rate, rose to 2.6% among private-sector employees, matching a postrecession high.

The only time the quits rate has been higher was in 2001, shortly after the government first began tracking how many people left their jobs.

The quits rate for all employees also rose a notch to set a postrecession high of 2.4%. Some 3.6 million workers quit — a record high

The rate at which people quit tends to rise when the economy is strong and workers are confident they can find another job, often one that pays better.

Read: For the first time in 11 years, 80% of Americans in their prime are working

Big picture: Job openings are still quite high and easily exceed the 6 million Americans officially classified as unemployed, but companies aren’t filling position as fast as they were at the start of the year.

The U.S. had added an average of 150,000 new jobs a month in the past six months, down from 232,000 in January.

The trade dispute with China has gotten worse and the global economy has weakened, delivering a blow to farmers, manufacturers and other big exporters. A lack of skilled labor available for hire has also been a chronic problem.

The U.S. economy can keep growing even if hiring slows, however, so long as companies shun layoffs. So far there’s no hard evidence that layoffs are on the rise.

Read: U.S. consumers are far from spent and that’s a lifesaver for a wobbly economy

Market reaction: The Dow Jones Industrial Average

DJIA, -0.30%

and S&P 500

SPX, -0.54%

fell in Tuesday trades. The 10-year Treasury yield

TMUBMUSD10Y, +1.51%

edged down to 1.65%.

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