A "Now Hiring" sign hangs in the window of a hair salon in the Greater Boston town of Medford, Massachusetts, U.S., August 12, 2025. REUTERS/Brian Snyder

By Lucia Mutikani

WASHINGTON (Reuters) -U.S. job openings increased marginally in August while hiring declined, consistent with lackluster labor market conditions that could allow the Federal Reserve to cut interest rates again next month despite resilient consumer spending.

Households are also growing pessimistic about the labor market. A survey from the Conference Board on Tuesday showed the share of consumers viewing jobs a "plentiful" fell this month to the lowest level since early 2021. There were 0.98 job openings for every unemployed person in August compared to 1.0 in July.

The labor market has eased amid slowing demand for workers, with economists blaming a lagging drag from uncertainty stemming from tariffs on imports as well as the rise of artificial intelligence. An immigration crackdown has also reduced labor supply, creating what Fed Chair Jerome Powell has described as a "curious balance."

"The labor market remains lethargic but is not getting rapidly sicker," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

Job openings, a measure of labor demand, rose 19,000 to 7.227 million by the last day of August, the Labor Department's Bureau of Labor Statistics said in its Job Openings and Labor Turnover Survey, or JOLTS report. Economists polled by Reuters had forecast 7.185 million unfilled jobs.

With the government likely to shut down when funding runs out at midnight on Tuesday, the report could be the last key economic data for a while. The Labor and Commerce departments said on Monday all data releases, including September's employment report due on Friday, would be suspended.

Job openings decreased 115,000 in the construction sector but were partly offset by a 106,000 increase in unfilled positions in the accommodation and food services industry. There were also more vacancies at retailers as well as in state and local government, excluding education. But federal government job openings fell 61,000 amid spending cuts. The job openings rate was unchanged at 4.3%.

Hiring decreased 114,000 to 5.126 million in August, concentrated in the trade, transportation and utilities industry. Accommodation and food services hiring also declined, likely the result of immigration raids that have led to deportations and kept fearful workers at home.

EMPLOYERS HOLDING ON TO WORKERS

The hires rate fell to 3.2% from 3.3%. Employers continued to hold on to their workers, with layoffs dropping 62,000 to 1.725 million. There were fewer layoffs in the trade, transportation and utilities industry. The layoffs rate was unchanged at 1.1% for a third straight month.

Weak hiring, however, means people who lose their jobs will have a tough time finding new opportunities. The Conference Board survey showed the share of consumers viewing jobs as plentiful dropped to 26.9% this month, the lowest level since February 2021, from 30.2% in August. There was no change in the proportion perceiving jobs as "hard" to get.

The survey's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, narrowed to 7.8 from 11.1 last month. This measure correlates to the unemployment rate in the Labor Department's monthly employment report.

The unemployment rate rose to nearly a four-year high of 4.3% in August. The U.S. central bank resumed easing policy this month, cutting its benchmark overnight interest rate by 25 basis points to the 4.00%-4.25% range, to aid the labor market.

Nonfarm payroll gains averaged only 29,000 jobs per month in the three months to August compared to 82,000 during the same period last year. But a raft of fairly strong reports, including second-quarter gross domestic product and August consumer spending, raised questions about whether more rate reductions were warranted this year.

Economists expect the Fed to put more emphasis on the labor market. Nonfarm payrolls likely increased by 50,000 jobs in September after rising only 22,000 in August, a Reuters survey of economists showed. The unemployment rate was forecast unchanged at 4.3%, but with risks tilted to the upside.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)