Job Openings Post Surprising Rise in September Amid Slowing Economy
A slowing job market is one of the ingredients the Federal Reserve is looking for as it begins a two-day meeting to set interest rates with most expectations for another 75 basis point hike in interest rates to thwart inflation . While other areas like retail and housing have slowed noticeably in recent months, the labor market has remained strong in the face of inflation and higher interest rates . Job gains were strongest in accommodation and food services (up 215,000); health care and social assistance (up 115,000); and transportation, warehousing and utilities (up 111,000). Available jobs declined in wholesale trade (down 104,000) and in finance and insurance (down 83,000).
While a slowing economy and aggressive Fed monetary policy usually leads to a rise in unemployment, so far that is not happening although economists like to point out that the jobs data is a lagging indicator. On Friday, the government will release its monthly jobs report for October. Forecasts call for 190,000 jobs to be created, down from September’s 263,000, but the data has surprised more often than not throughout the past two years. Inflation has been trending down from its 9.1% peak in June but nowhere near enough for the Fed to put the brakes on yet. And, while job openings did fall in August from 11.7 million in July, the rise in September likely will do nothing to stop the Fed from hiking by 75 basis points on Wednesday.That will set up an interesting December meeting. Up to this point, analysts have settled on the Fed stepping down to a 50 basis point hike and perhaps a pause after that. Markets will be looking to Jerome Powell, when the Fed chairman gives his post-meeting press conference.
“The Fed has more work to do to break the back of inflation , but clearly inflation is past its peak,” Jeffrey Roach, chief economist at LPL Financial, said ahead of the job openings report’s release.”Expectations are the economic slowdown will become more pronounced, and as the lagged effect of cumulative rate hikes works its way into the broader economy, the unemployment rate will rise and the number of job openings will continue to fall.”Robert Frick, corporate economist at Navy Federal Credit Union, tweeted: “JOLTS openings rebound to 10.7 mil from 10.3 mil last month. Well, that’s JOLTing for the Fed, but great for Americans looking for better jobs . Is this in any way inflation ary? Not with consumer spending flat and employee costs dropping.”
A slowing job market is one of the ingredients the Federal Reserve is looking for as it begins a two-day meeting to set interest rates with most expectations for another 75 basis point hike in interest rates to thwart inflation. While other areas like retail and housing have slowed noticeably in recent months, the labor market has remained strong in the face of inflation and higher interest rates.
Job gains were strongest in accommodation and food services (up 215,000); health care and social assistance (up 115,000); and transportation, warehousing and utilities (up 111,000). ”Expectations are the economic slowdown will become more pronounced, and as the lagged effect of cumulative rate hikes works its way into the broader economy, the unemployment rate will rise and the number of job openings will continue to fall.
