U.S. job openings rose more than expected for the second month in a row as the labor market remains surprisingly resilient in the face of the Federal Reserve’s aggressive interest-rate hike campaign.
The Labor Department said Wednesday there were 9.6 million job openings in October, an increase from the downwardly revised 9.5 million openings reported the previous month. Economists surveyed by Refinitiv expected a reading of 9.2 million.
The Federal Reserve closely watches these figures as it tries to gauge labor market tightness and wrestle inflation under control. The higher-than-expected figure indicates that demand for employees still outpaces the supply of available workers.
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The central bank has responded to the inflation crisis and the extremely tight labor market by raising interest rates at the fastest pace in decades. Officials have so far approved 11 rate hikes, lifting the federal benchmark funds rate to the highest level since 2001. Policymakers have signaled that an additional rate hike is on the table this year if economic data points to a resurgence in price pressures.
The latest jobs data could give policymakers more space to hike rates – and hold them at elevated levels for longer.
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“Despite the imbalance between the demand and supply of workers in the economy, the Fed will likely announce no change in rates at today’s meeting,” said Jeffrey Roach, chief economist at LPL Financial. “However, the Fed will likely keep an overall hawkish tone since inflation is still above the long-run target.”
The uptick in vacancies last month largely stemmed from bars and restaurants as well as arts, entertainment and recreation services, according to the report.
Job openings remain historically high. Before the COVID-19 pandemic began in early 2020, the highest on record was 7.6 million. There are roughly 1.5 jobs per unemployed American.
“The labor market is trending in the right direction but still has a ways to go before policymakers are comfortable,” Roach said.
The number of Americans quitting their jobs, meanwhile, ticked higher to 3.7 million, or roughly 2.3% of the workforce, indicating that workers remain confident they can leave their jobs and find employment elsewhere.
Switching jobs has been a windfall for many workers over the past year: Job-switchers saw their real hourly wage increase 6.7% in September, compared to a 5.4% pay increase for workers who stayed in the same job, according to recent Atlanta Fed data.
The report also indicated that layoffs declined last month, falling from 1.7 million to 1.5 million.
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