US job openings fell in October to still-high level
WASHINGTON — U.S. job openings dropped in October but remained high, a sign that businesses became slightly less needy for workers as the Federal Reserve ramps up interest rates in an effort to cool the economy. The Labor Department reported Wednesday that
Employers had 10.3million job vacancies in October, compared to 10.7million in September. Even with this drop, job openings were slightly lower than in August when they fell below 10.3million before rebounding the next month.
The number of people quitting their job also fell to 4 million in October from 4.1 million.
The Federal Reserve closely monitors the numbers on job openings, quits, and other indicators to gauge the strength of the labor market. The Fed is trying to accomplish a delicate task by slowing down hiring and the wider economy to cool inflation but not too much to cause a recession.
While more job opportunities are good for people looking for work, Fed officials would prefer to see the number of open positions fall. This is because fewer job openings would mean less competition between businesses to find and retain workers, which would reduce pressure on them to raise their wages.
Last month, there were fewer open jobs in construction, manufacturing, and professional services like architecture and engineering. Health care . They increased in financial services, but remained high for restaurants and bars.
” The labor market is cooling (whatever the Fed wants), but it is far away from being cold,” Jennifer Lee, an economist with BMO Capital Markets, stated in an email.
Fed officials also want to see a decline in the number of people quitting. Workers often quit to find a better-paying job. People who have quit their job to find a better one have seen historically high wage increases since the pandemic.
Many businesses then pass on higher labor costs to customers via price increases, which fuels inflation.
The Fed wants to slow down wage gains but not eliminate them. It hopes that rate increases will reduce the number of jobs companies advertise.
Fed Chair Jerome Powell will speak Wednesday afternoon about inflation and the labor markets in a highly anticipated speech. Wall Street traders will be watching closely for signs that Powell may give about how much the Fed will raise interest rate.
Powell will be making an appearance two days before the U.S. releases November’s critical employment data.
The Fed raised its benchmark interest rate six more times this year, to a range of 3. 75% to 4.4%, the highest level in around 15 year, in an effort to curb inflation. The prices have risen 7.7% in the last year, which is close to the record for inflation in four decades. The Fed is known for trying to slow price rises by weakening the economy, pushing up unemployment, and this reduces spending and often brings down inflation.
But with job openings at an all-time high (they hit a record for two decades of 11.9million in March), Fed officials hope to bring down inflation and wage increases by reducing the number of available jobs. However, this will not cause layoffs to increase significantly. Many economists doubt that such an approach will succeed because historically, layoffs have increased when there have been fewer job openings.
Wednesday’s report — known as the Job Openings and Labor Turnover Survey — provides greater detail about the labor market, while the monthly jobs report on Friday includes the unemployment rate and the number of jobs added or lost each month.
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