Job opportunities rise to 10.7 million despite Fed’s efforts to cool economy

US job openings rose unexpectedly in September, suggesting that the US labor market is not cooling as fast as inflation fighters at the Federal Reserve had hoped.

The Labor Department said Tuesday that employers posted 10.7 million job vacancies in September, up from 10.3 million in August. Economists had expected the number of job openings to drop below 10 million for the first time since June 2021.

For the past two years, as the economy recovers from the COVID-19 slowdown of 2020, employers have complained that they are not getting enough employees. With so many jobs available, workers may resign and look for employment that pays more or offers better perks or flexibility. Meanwhile, companies have been forced to raise wages to attract and keep employees. Higher wages have contributed to inflation, which hit a 40-year high in 2022.

This has prompted the Federal Reserve to boost interest rates five times so far this year. sixth rate hike Expected to be on November 2. The job opening figures show that the job market in the US is still tight, Bill Adams, chief economist at Comerica Bank, said in an email.

“The Fed was surprised by how long and by how much inflation rose through the end of 2021 and 2022,” Adams said. “They want to make sure their next mistake doesn’t come from underestimating the intensity or persistence of inflation.”

More job opportunities than unemployed workers

In another sign the labor market remains tight and employers are unwilling to let workers go, layoffs fell to 1.3 million in September, the lowest since April. But the number of people leaving jobs fell to less than 4.1 million in September, which is still high by historical standards.

“According to all the key metrics in this report, the labor market is resilient,” said Nick Bunker, head of economic research at the Indeed Hiring Lab. “Job openings are still high in the number of unemployed workers, leaving rates remain high and layoffs are still well below pre-pandemic levels.”

Still, there are some signs of cooling in some parts of the labor market, according to Julia Pollack, chief economist at ZipRecruiter. He said job opportunities in health care have hit a record low, but other industries are holding off on hiring.

,[E]Elsewhere, the labor market is slowly cooling down and returning to normal, Pollack said. “And in some industries, particularly in finance and insurance, the labor market is already in a deep freeze.”

The target of the central bank is a so called soft landing Raising rates is enough to slow economic growth and bring down inflation without a recession.

Fed Chairman Jerome Powell has expressed hope that inflationary pressures can be relieved by employers cutting job openings, not jobs.

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