Job openings unexpectedly jump in August
US job openings rebound in August despite high interest rates
FreedomWorks senior economist Steve Moore provides insight on the state of the economy on 'Making Money.'
U.S. job openings unexpectedly rebounded in August as the labor market remains surprisingly resilient in the face of the Federal Reserve's aggressive interest-rate hike campaign.
The Labor Department said Tuesday there were 9.6 million job openings in August, a marked increase from the revised 8.92 million openings reported the previous month.
Economists surveyed by Refinitiv expected a reading of 8.8 million. It marked the first time in three months that job listings trended higher.
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.
WORKERS NOW DEMANDING NEARLY $80K TO START NEW JOB
Attendees at a career fair at a community college in Bolivia, North Carolina, on April 20, 2023. (Photographer: Allison Joyce/Bloomberg via Getty Images / Getty Images)
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 higher – and hold them at elevated levels for longer.
"Any wonder why the Fed expects to raise interest rates again?" said Greg McBride, chief financial analyst at Bankrate. "With 1.5 job openings for every unemployed worker, there is little evidence of substantial easing in labor market demand, a risk to getting inflation lower."
Job seekers visit booths during the Spring Job Fair at the Las Vegas Convention Center on April 15, 2022. (K.M. Cannon/Las Vegas Review-Journal / Getty Images)
The uptick in vacancies last month largely stemmed from professional and business services, finance and other services and nondurable goods manufacturing, 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.
"One of the top items the Fed wants to see is labor supply match labor demand, and the economy is not quite there yet," said Jeffrey Roach, chief economist at LPL Financial.
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The number of Americans quitting their jobs, meanwhile, ticked higher to 3.6 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 6.4% in July, compared with a 5.4% pay increase for workers who stayed in the same job, according to recent Atlanta Fed data.