Job openings in the United States continued to expand last month, despite efforts by the Federal Reserve to slow the economy down and lower record high inflation with massive interest rate hikes.
The September readings for the department’s monthly Job Openings and Labor Turnover Survey (JOLTS) partially reversed a decline in August, while job openings increased in all four U.S. regions.
The number of available jobs has been around 10 million for the past 16 consecutive months, well above pre-pandemic figures.
There were only 7.7 million open positions in February 2020, the highest on record up to that point.
Balancing Rate Hikes Versus Raising Unemployment
The Fed has been closely monitoring the Labor Department, in an attempt to measure growth in the extremely tight labor market, while it tries to cool it down.The higher-than-expected job figures from last month may push policymakers into raising interest rates even further, as they currently gather for a two-day policy meeting.
Chairman Jerome Powell admitted that higher interest rates could “give rise to increases in unemployment,” but it is worth the sacrifice, reported Fox Business.
“We think we need to have softer labor market conditions,” he said.
“And if we want to set ourselves up really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn’t,” Powell concluded.
The Fed is expected to deliver another 75 basis-point hike on Nov. 2, as it attempts to reduce demand for labor and slow the overall economy in order to bring inflation down to its 2 percent target.
The Fed has already pushed through three consecutive monthly 75-basis-point rate hikes.
Policymakers have so far raised the benchmark policy rate from near zero in March to between 3.00 to 3.25 percent, the fastest tightening since the 1990s.
Workers Continue Search For Better Employment
The number of Americans quitting their jobs for better employment opportunities remained steady at 4.1 million, which is about 2.7 percent of the total workforce.This is slightly below this year’s record high of 4.5 million Americans, but well above the pre-pandemic level of about 3.6 million.
The ability of workers to switch jobs has been beneficial for many Americans over the past year.
Meanwhile, analysts are eagerly awaiting the release of the October jobs report on Nov. 4, which is projected to show only 200,000 new hires, after a gain of 263,000 in August.
The unemployment rate is expected to rise higher to 3.6 percent, according to economists surveyed by Reuters.