Job Openings Surge, Despite Fed’s Efforts to Cool Labor Market
November 1, 2022
Job openings surged in September, even as the Federal Reserve seeks to cool down a historically hot labor market in its efforts to tamp down on the worst inflation in more than four decades.
The number of job openings in September jumped to 10.72 million, according to the Bureau of Labor Statistics’ most recent Job Openings and Labor Turnover Survey (JOLTS). That is well above the estimates of 9.85 million from FactSet, and an increase of nearly half a million from August’s upwardly revised numbers.
Officials at the Fed closely watch the JOLTS reports for insights into the labor market, and the latest report suggests that the Fed is likely to maintain its current stance of aggressively raising rates to combat inflation. The Fed is widely expected to raise interest rates by 0.75 later this week, making the fourth consecutive increase of that magnitude.
September’s openings were nearly double the 5.8 million unemployed people seeking work that month, meaning that there are 1.9 available jobs for every prospective worker. This imbalance between supply and demand in the labor market is driving wage growth and increasing inflationary pressure.
Job openings do appear to have peaked in March at 11.9 million and have declined in four of the last six months. However, even with the slowdown, openings remain elevated well above the monthly average of 7.2 million in 2019, before the pandemic began.
The JOLTS report also showed that the number of workers who quit voluntarily fell slightly from the month before, but at 4.1 million, the number remains elevated. Workers generally only quit when they are certain they can secure higher wages or better benefits elsewhere, and a high quits rate is another sign that inflationary pressure remains elevated in the labor market.