U.S. job openings rose unexpectedly in September, even as the Federal Reserve tries to bring down near-record inflation and cool the labor market with the most aggressive interest rate hikes since decades.
The Labor Department said Tuesday there were 10.7 million job openings in September — a slight increase from the previous month’s reading of 10.1 million.
Number of jobs available exceeded 10 million for 16 consecutive months; before the start of the pandemic in February 2020, the highest record was 7.7 million.
“The high number of job openings continues to underscore the huge gap between labor supply and demand, contrary to what the Federal Reserve wants to see as it battles inflation,” said Mark Hamrick, Senior Economic Analyst at Bankrate. “On the other hand, the strength of the labor market increases job security, which is positive for workers and those who aspire to work.”
FED’S WAR ON INFLATION COULD COST 1M JOBS
The Federal Reserve is watching these figures closely as it tries to assess the tensions in the labor market; the higher-than-expected number of openings could alarm policymakers as they try to slow the economy and calm painfully high inflation.
“The Federal Reserve will likely continue to raise interest rates to slow aggregate demand and try to rebalance supply and demand,” said Jeffrey Roach, chief economist at LPL Financial. “Rising unemployment should correct some of the imbalances between the number of people looking for work and companies with vacancies.”
SEVERE RECESSION NEEDED TO COOL INFLATION, BANK OF AMERICA ANALYSTS SAY
Meanwhile, the number of Americans quitting their jobs remained steady at 4.1 million, or about 2.7% of the workforce – below the peak of 4.5 million recorded earlier this year, but well above the pre-pandemic level of around 3.6 million. Hiring was also slightly slowed to 6.1 million.
Changing jobs has been a boon for many workers over the past year, with employees seeing an average annual growth rate of 6.7% in wages – a marked increase from the 4.9% of workers who do not change jobs, according to the Atlanta Fed.
The Fed responded to the inflation crisis and extremely tight labor market by raising interest rates at the fastest rate in decades. Authorities approved three consecutive rate hikes of 75 basis points in June, July and September, and signaled that another of that magnitude is on the table in November.
President Jerome Powell conceded that higher rates could “lead to higher unemployment”.
“We think we need to have more flexible labor market conditions,” Powell said. “And if we want to set ourselves up to pave the way for another period of very strong labor markets, we have to put inflation behind us. I wish there was a painless way to do that. ‘there is not any.”
CLICK HERE TO LEARN MORE ABOUT FOX BUSINESS
The data comes ahead of the release of the October jobs report on Friday morning, which is expected to show employers hired 200,000 workers after a gain of 263,000 in August. The unemployment rate is expected to rise slightly to 3.6%.
#Job #openings #rise #unexpectedly #September #Fed #efforts #cool #labor #market