The labor market may be cooling off, but the temperature decline is far from a plunge, according to the latest federal Job Openings and Labor Turnover Survey (JOLTS) report. Demand for new workers remains robust, layoff rates are very low and workers continue to quit their jobs at high rates. The labor market is loosening a bit, but by any standard it is still quite tight. The outlook for economic growth may not be as rosy as it was a few months ago, but there’s no sign of imminent danger in the labor market.

Job openings continue to outnumber unemployed workers, but the ratio has declined for three straight months. This statistic has become a favorite labor market indicator of Federal Reserve Chair Jay Powell and other members of the Fed. The continued decline in this metric is welcome news to the Fed. However, if their goal is to get the ratio closer to 1 then they have a ways to go given June’s reading of 1.8.

While employers may have pulled back on their intention to hire, they continue to refrain from laying off workers at higher rates. The layoffs and discharges rate remain near historic lows. In fact, this is the 16th straight month that the layoff rate has been below its pre-pandemic bottom. Layoffs remain low in industries such as Retail Trade and Transportation & Warehousing. Consumption might be pivoting away from goods toward services, but employers aren’t shedding workers. Note that the layoff rate in the Information supersector, which includes tech firms, only saw a slight rise in June to 1%.

At this point in the labor market recovery, a decline in job openings isn’t concerning. A pullback in hiring intentions absent a significant decline in actual hiring is a sign of a cooling labor market, but not one where the temperature is plummeting. The labor market remains hot. A continued slow cooldown would be more than manageable.