Job openings fell more than expected in July. The data comes as investors closely watch for signs of further cooling in the labor market amid speculation the Federal Reserve will cut interest rates this month.

New data from the Bureau of Labor Statistics released Tuesday showed there were 7.67 million jobs open at the end of July, a decrease from the 7.91 million seen in June. This marked the lowest number of job openings since January 2021.

June's figure was revised lower from the 8.18 million open jobs initially reported. Economists surveyed by Bloomberg had expected the report to show 8.1 million openings in June.

The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.5 million hires were made during the month, a slight uptick from June. The hiring rate ticked up to 3.5% in July, up from 3.3% in June. Also in Wednesday's report, the quits rate, a sign of confidence among workers, rose to 2.1%, up from 2% in June.

The data comes as slowing in the labor market has moved into focus. In a speech in late August, Federal Reserve chair Jerome Powell said the cooling in the labor market has been "unmistakeable." Powell added the downside risks to the central bank's mandate for full employment have risen.

"It seems unlikely that the labor market will be a source of elevated inflationary pressures anytime soon," Powell said. "We do not seek or welcome further cooling in labor market conditions."

This has pushed economists to argue that further signs of labor market deterioration would likely prompt the central bank to cut interest rates more aggressively.

"We think that the bar would be relatively high to move the [Fed] consensus to a 50 bp rate cut in September — and require fairly ominous warnings on the labor market front," UBS chief US economist Jonathan Pingle wrote in a note on Tuesday.

A more comprehensive look at the labor market will come on Friday with the August jobs report, and economists expect the report to show the July report may have overstated weakness in the labor market.

Consensus expectations among economists surveyed by Bloomberg project the US economy added 165,000 jobs in August while the unemployment rate ticked down to 4.2%. This would mark the first decrease in the unemployment rate since March.

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance