US job openings fell to 7.4 million last month as job market continues to cool
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Employers posted 7.4 million job vacancies last month, a sign that the American job market continues to cool.
The Labor Department reported Tuesday that job openings in June were down from 7.7 million in May and were about what forecasters had expected.
The Job Openings and Labor Turnover Survey (JOLTS) showed that layoffs were little changed in June. But the number of people quitting their jobs — a sign of confidence in their prospects elsewhere — dropped last month to the lowest level since December. Hiring also fell in May.
Posting on Bluesky, Glassdoor economist Daniel Zhao wrote that the report “shows softer figures with hires and quits rates still sluggish. Not dire, not amazing, more meh.’'
The U.S. job market has lost momentum this year, partly because of the lingering effects of 11 interest rate hikes by the inflation fighters at the Federal Reserve in 2022 and 2023, and partly because President Donald Trump’s trade wars have created uncertainty that is paralyzing managers making hiring decisions.
On Friday, the Labor Department will put out unemployment and hiring numbers for July. They are expected to show that the unemployment rate ticked up to a still-low 4.2% in July from 4.1% in June. Businesses, government agencies, and nonprofits are expected to have added 115,000 jobs in July, down from 147,000 in June, according to a survey of economists by the data firm FactSet.
The seemingly decent June hiring numbers were weaker than they appeared. Private payrolls rose just 74,000 in June, fewest since last October when hurricanes disrupted job sites. And state and local governments added nearly 64,000 education jobs in June – a total that economists suspect was inflated by seasonal quirks around the end of the school year.
So far this year, the economy has been generating 130,000 jobs a month, down from 168,000 last year and an average of 400,000 a month from 2021 through 2023 during the recovery from COVID-19 lockdowns.
Employers are less likely to hire, but they’re also not letting workers go either. Layoffs remain below pre-pandemic levels.
Union Pacific (UNP.N), opens new tab said on Tuesday it would buy smaller rival Norfolk Southern (NSC.N), opens new tab in an $85-billion deal to create the country's first coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the U.S.
If approved, the deal would be the largest-ever buyout in the sector and combine Union Pacific's stronghold in the western two-thirds of the United States with Norfolk's 19,500-mile network that primarily spans 22 eastern states.
The two railroads are expected to have a combined enterprise value of $250 billion and would unlock about $2.75 billion in annualized synergies, the companies said.
The $320 per share price implies a premium of 18.6% for Norfolk from its close on July 17, when reports of the merger first emerged.
The companies said on Thursday they were in advanced discussions for a possible merger.
The deal will face lengthy regulatory scrutiny amid union concerns over potential rate increases, service disruptions, and job losses. The 1996 merger of Union Pacific and Southern Pacific had temporarily led to severe congestion and delays across the Southwest.
The deal reflects a shift in antitrust enforcement under U.S. President Donald Trump's administration. Executive orders aimed at removing barriers to consolidation have opened the door to mergers that were previously considered unlikely.
Surface Transportation Board Chairman Patrick Fuchs, appointed in January, has advocated for faster preliminary reviews and a more flexible approach to merger conditions.
Even under an expedited process, the review could take from 19 to 22 months, according to a person involved in the discussions.
Major railroad unions have long opposed consolidation, arguing that such mergers threaten jobs and risk disrupting rail service.
"We will weigh in with the STB (regulator) and with the Trump administration in every way possible," said Jeremy Ferguson, president of the SMART-TD union's transport division, after the two companies said they were in advanced talks last week.
"This merger is not good for labor, the rail shipper/customer, or the public at large," he said.
The companies said they expect to file their application with the STB within six months.
The SMART-TD union's transport division is North America's largest railroad operating union with more than 1,800 railroad yardmasters.
The North American rail industry has been grappling with volatile freight volumes, rising labor and fuel costs, and growing pressure from shippers over service reliability, factors that could further complicate the merger.
Union Pacific's shares were down about 1.3%, while Norfolk fell about 3%.
Agents at the STB are already conducting preparatory work, anticipating they could soon receive not just one, but two megamerger proposals, a person close to the discussions told Reuters on Thursday.
If both mergers are approved, the number of Class I railroads in North America would shrink to four from six, consolidating major freight routes and boosting pricing power for the industry.
The last major deal in the industry was the $31-billion merger of Canadian Pacific (CP.TO), opens new tab and Kansas City Southern, that created the first and only single-line rail network connecting Canada, the U.S., and Mexico.
That deal, finalized in 2023, faced heavy regulatory resistance over fears it would curb competition, cut jobs and disrupt service, but was ultimately approved.
Union Pacific is valued at nearly $136 billion, while Norfolk Southern has a market capitalization of about $65 billion, according to data from LSEG.
The U.S. trade deficit in goods narrowed to the lowest level in nearly two years in June as imports fell sharply, cementing economists' expectations that trade likely accounted for much of an anticipated rebound in economic growth in the second quarter.
While the unexpected contraction reported by the Commerce Department on Tuesday could prompt economists to upgrade their gross domestic product estimates for last quarter, the steep decline in imports flagged slowing domestic demand.
Imports surged in the first quarter as businesses rushed to beat higher prices from President Donald Trump's sweeping tariffs on foreign merchandise, contributing to the first decline in GDP in three years. The Trump administration has announced several trade deals, which economists said could help to ease uncertainty.
"This lends upside risk for our (GDP) forecast," said Matthew Martin, a senior U.S. economist at Oxford Economics. "As trade policy uncertainty eases, imports and exports may begin to find their troughs in the second half of the year and become less volatile."
The goods trade gap narrowed 10.8% to $86.0 billion last month, the lowest level since September 2023, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast the goods trade deficit would rise to $98.20 billion.
Imports of goods decreased $11.5 billion, or 4.2%, to $264.2 billion, the lowest level since March 2024. The decline was led by a 12.4% plunge in consumer goods imports.
Industrial supplies imports, which include crude oil and non-monetary gold, slumped 5.5%. Imports of foods, feeds, and beverages fell 1.1%, while those of motor vehicles decreased 2.0%. But capital goods imports rose 0.6%.
Goods exports slipped $1.1 billion, or 0.6%, to $178.2 billion. They were held back by an 8.1% drop in exports of industrial supplies. But exports of capital goods shot up 4.7%, while shipments of foods, feeds, and beverages increased 4.0%. Shipments of consumer goods advanced 1.5%.
The government is scheduled to publish its advance estimate of second-quarter GDP on Wednesday. A Reuters survey of economists forecasts that GDP rebounded at a 2.4% rate in the April-June period after contracting at a 0.5% in the first three months of this year.
Though a reversal is expected in the trade deficit after it sliced off a record 4.61 percentage points from GDP in the first quarter, some of the boost to growth was likely partially offset by businesses drawing down on some of the imports, which had landed in warehouses as inventory.
The Census Bureau report also showed wholesale inventories increased 0.2% in June after declining by 0.3% in May.
Stocks at retailers rose 0.3%, matching May's gain. They were driven by a 0.9% increase in motor vehicle stocks. Excluding motor vehicles, retail inventories were unchanged. This component goes into the GDP calculation.
