Employers posted 9.6 million job openings in September, up from 9.5 million in August according to the U.S. Bureau of Labor Statistics’ Job monthly Openings and Labor Turnover Survey (JOLTS). The slightly elevated numbers signal that the U.S. job market remains strong even as the U.S. Federal Reserve attempts to cool the economy.
“Today’s JOLTS report was, simply, a bit boring — in the best possible way,” Nick Bunkers, Indeed hiring lab director of economic research, said in note on today’s report. “Not much has changed over the past few months, and the labor market appears to be stabilizing at a level consistent with a sustainable economy.”
The September openings are down from a record 12 million in March 2022 but remain high by historical standards. Before 2021 — when the American economy began to surge from the COVID-19 pandemic — monthly job openings had never topped 8 million. Unemployment was 3.8% in September, just a couple of ticks above a half century low.
Openings were up by 141,000 at hotels and restaurants, which have struggled to attract and keep workers since the COVID-19 pandemic struck in early 2020.
Focus on wages
Layoffs fell to 1.5 million from 1.7 million in August, more evidence that workers enjoy an unusual degree of job security. The number of Americans quitting their jobs — a sign of confidence they can find better pay elsewhere — was virtually unchanged.
The Federal Reserve’s inflation fighters would like to see the job market cool. They worry that strong hiring pressures employers into raising wages — and trying to pass the higher costs along with price increases that feed inflation.
“The quits rate, which is a good leading indicator of wage pressures, held steady and suggests that wage growth will continue to moderate,” Nancy Vanden Houten, U.S. lead economist at Oxford Economics, said in a note.
Job growth has stayed strong even as the Fed raises interest rates at a record pace as it battles equally historic inflation.
The Fed has raised its benchmark interest rate 11 times since March 2022 in an effort to contain inflation that hit a four-decade high in 2022. In September, consumer prices were up 3.7% from a year earlier, down from a peak 9.1% in June last year but still above the Fed’s 2% target.
The combination of sturdy hiring, healthy economic growth and decelerating inflation has raised hopes the Fed can pull off a so-called soft landing — raising rates just enough contain price increases without tipping the economy into recession. The central bank is expected to announce later Wednesday that it will leave its benchmark rate unchanged for the second straight meeting as it waits to assess the fallout from its earlier rate hikes.
“We don’t expect further Fed rate hikes, but risks continued to be tilted in that direction,” Vanden Houten said. “The Fed needs to see more evidence of slower job and wage growth to be convinced that inflation is on a sustainable path back to 2%.”
On Friday, the Labor Department releases its jobs report for October. Forecasters surveyed by the data firm FactSet expect that U.S. employers added a solid 189,000 jobs last month and that the unemployment rate stayed at 3.8%.
Impact of autoworkers strike on jobs forecast
Other analysts, such as Bill Adams, chief economist for Comerica Bank, predict an uptick in unemployment, citing economic data from payroll processing company ADP. Employment fell by 13,000 in the Midwest in September, ADP reported, a likely result of the UAW strike, according to Adams.
“Comerica forecasts for the unemployment rate to tick up to 3.9% in Friday’s jobs report for October from 3.8% in September, reflecting headwinds from the strike that will presumably abate in November,” Adams said in a research note.
