Ugly JOLTs Report Hints At Another Negative Payrolls Print On Friday

After five straight months of JOLTS beats, including two blowout prints for April and May and zero misses since 2025, last month's JOLTS report was a surprising miss (despite the previously discussed surge in government job openings). Fast forward to today when the latest JOLTS report made it two misses for two, with the BLS announcing moments ago that in July, the US had 7.271 million job openings, up from a downward revised 7.182 million...

... and missing the consensus estimate of 7.313 for the second month in a row.

What is more notable, however, is the revision: the June number was smashed, and revised lower by almost 200K, from 7.359MM, to 7.182MM, the biggest negative revision since 2025.

This is what the BLS said about the massive negative revisions: "The number of job openings for June was revised down by 177,000 to 7.2 million, the number of hires was revised down by 16,000 to 5.3 million, and the number of total separations was revised down by 14,000 to 5.3 million. Within separations, the number of quits was revised down by 19,000 to 3.2 million, and the number of layoffs and discharges was revised up by 19,000 to 1.8 million." 

Going back to this month's report (which will surely be revised lower too in the coming months), where did the openings come from? According to the BLS the number and rate of job openings were little changed at 7.3 million and 4.4 percent, respectively, in July. The jump in job openings was most pronounced in durable goods manufacturing (+76,000). Taking a closer look shows declines in job openings in Trade and Transportation, Professional Services, Leisure and Hospitality, offset by an increase in job openings in Information, Private Education...

... but just like a month ago, the biggest increase continues to be in government, where the number of job openings surged again, from 762K to 810K and back to the highest level in the past year.

The July rise in job openings was juxtaposed with an overall drop in July employment, which meant that after 9 months of labor surplus which ended in March, we now have a fourth consecutive month of more job openings than unemployed workers, and in June the surplus was 355K, the biggest surplus since the 566K in Jan 2025, and a concerning development for the broader labor market which according to most other measures continues to fire on all cylinders.

The latest JOLTS data also means that after falling back to 0.9x in March, in April the ratio of job openings rose over 1.1x for the first time since January 2025.

While the job openings number was weaker than expected for the second time this year, in July we also saw continued weakness in both hires and quits, In July the number of Quits - or the "take his job and shove it" indicator - dropped by 157K to 3.056MM from 3.213MM indicating a drop in confidence that better jobs await elsewhere; at the same time hires also dropped by 278K, from 5.332MM to 5.054MM, the lowest since February.

It goes without saying that disappointing job openings (which only rose due to a massive downward revision to historical data) while hires and quits slump at a time when payrolls may have posted their second negative print in a row (as we will find out on Friday), leads one to scratch their head how weak the labor market truly is. 

In any case, since this hires number feeds directly into the payrolls calculations (after netting out separations) this explains why the July payrolls report dropped by 23K. And since the JOLTS implied number is far weaker than that, having printed negative for a third month in a row, we fully expect the August payrolls report this Friday to be a catch up, and may very well print negative once again.

Overall, this was a weak JOLTS report, with weakness in openings offset by revisions (and a continued growth in job openings), yet both hires and quits tumbled, and shows that after some significant strength in the early part of of 2026, US labor market is now hitting an air pocket and this could translate into another notable miss in this Friday jobs report.