The number of job openings in the United States plunged to a 28-month low of 8.827 million in July, according to data released Tuesday. This was down 338,000 from the previous month and well below economist expectations of 9.465 million openings.

The decline in job openings was broad-based, with declines in most major sectors, according to the Bureau of Labor Statistics data. The biggest declines were in professional and business services (-198,000), health care and social assistance (-130,000) and state and local government excluding education (-67,000).

With fewer positions available, the labor market is cooling off following months of rapid hiring. This is due to the Federal Reserve’s monetary policy tightening, which has finally begun to have an effect on the real economy by restoring equilibrium between supply and demand.

The Fed pays close attention to the ratio of available jobs to jobless persons as a proxy for the tightness of the labor market. A lower ratio of job vacancies to jobless persons may indicate reduced pay pressures and a resulting reduction in inflationary pressures.

Chart: Job Openings And Labor Turnover Survey

Consumer Confidence Falls To Lowest Level In 16 Months

In a separate report, the Conference Board said its Consumer Confidence Index fell to 106.1 in August, down from 116 in July. This was the lowest reading since February 2021 and below economist expectations of 117.1.

The Market Reacts

The dollar moved sharply lower after the data, with the U.S. dollar index (DXY) falling 0.3%, as investors revised their rate hike expectations lower.

Treasury yields also moved lower, with the 10-year benchmark yield falling 6 basis points to 4.15%. Stocks rallied, with the SPDR S&P 500 ETF Trust (NYSE:SPY) rising 0.7%.

Markets now await a slew of key economic data, culminating on Friday with the August jobs report.

Read more: 8 Economic Indicators To Watch This Week For Clues On Fed’s Next Move

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