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Despite the Fed’s aggressive actions, September saw unexpectedly more job openings

In September, the number of jobs available in the United States increased. This surprised economists who expected it to fall due to the Federal Reserve’s aggressive actions to cool the economy.

According to data from the Bureau of Labor Statistics, 10.7 million job openings were created in September, compared with 10.3 million in August.

According to Refinitiv estimates, economists predicted that September would see a drop in job openings to 10 million.

According to the Job Openings and Labor Turnover Survey (JOLTS), accommodation and food services had the highest number of new jobs.

In September, there were 1.9 open jobs for every person searching for work — an increase of 1.7 in August. This ratio is important as the Fed attempts to lower stubbornly high inflation. Workers have the power to demand a higher salary when there are fewer jobs than workers, which can lead to inflation.

Last month’s layoffs were 1.3 million, down from 1.5 million in August.

Ron Hetrick, a senior economist at Lightcast, stated in a statement that if you are waiting for signs of labor inflation decreasing, you will have to wait.

Despite the headline numbers, JOLTS also revealed signs of cooling in labor markets: Hires fell to just below 6.1 million, their lowest level since Feb 2021, and quits fell below 4.1million, which is the second-lowest level this year.

According to Julia Pollak (chief economist at ZipRecruiter), the number of US jobs is decreasing and the gap between labor demand and supply is narrowing.

She stated in an interview that “Make no mistake, there is a cooling labor market.”

Pollak stated that while the monthly numbers may show volatility, particularly in openings; overall trends show a decrease in openings and hires.

She said, “It’s not going to be a straight line.” “This series is more like a zigzag.”

Two labor markets: A story of two stories

More than 20 million jobs were lost in the global pandemic. The recovery was hampered by viruses and health and safety precautions. There has been a surge in early retirements and disruptions to critical support industries, which have prevented some people from returning to the workforce.

Pollak stated that this means the labor market still shows unique dynamics due to the once-in-a-lifetime event.

She said that the JOLTS latest report shows two labor markets, with industries like health care continuing to boom and rate-sensitive ones such as finance or insurance seeing their job openings fall in recent months.

Eugenio Aleman, Raymond James’ chief economist, stated that Tuesday’s report does not provide enough certainty for the Fed to be reassured that the labor market has loosened enough to alleviate inflation concerns.

He stated that while today’s job openings increase doesn’t compensate for last month’s 890,000.000 drops, it was a sign that the market for jobs is still tight. This is bad news for the Federal Reserve as well as for inflation. “We believe that Wednesday’s Fed Open Market Committee meeting will see the Fed raise rates by 75 basis points.

Next, investors and Fed officials will be focusing their attention on Friday’s closely-watched monthly jobs report. This is expected to show continued slowing. It is expected that October saw around 200,000 jobs added, down from the average of 420,000 jobs this year.

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