US job openings rise in December to highest level in 3 months
Job openings unexpectedly rise in December despite high interest rates
'The Claman Countdown' panelists Simeon Hyman and John Lonski break down the Federal Reserve's favorite inflation number.
U.S. job openings unexpectedly rose in December to the highest level in three months, underscoring the resilience of the labor market even in the face of higher interest rates.
The Labor Department said Tuesday there were 9 million job openings in December, an increase from the upward revised 8.9 million openings reported the previous month. Economists surveyed by Refinitiv expected a reading of 8.7 million.
"The report boils down to no news is good news," said Robert Frick, corporate economist with Navy Federal Credit Union. "Job openings are still a healthy level above those seeking work, and the other numbers remain where a healthy labor market should find them. While openings did tick up, the increase is well within the margin of error."
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Elementary school educators gather to talk to prospective hires during a hiring event for Prince George's County school district hosted at Dr. Henry A. Wise Jr. High School in Upper Marlboro, Maryland, on Aug. 2, 2023. (Amanda Andrade-Rhoades/For The Washington Post via Getty Images / Getty Images)
The Federal Reserve closely watches these figures as it tries to gauge labor market tightness and wrestle inflation under control.
The central bank responded to the inflation crisis by raising interest rates at the fastest pace in decades. In the span of two years, officials approved 11 rate hikes, lifting the federal benchmark funds rate to the highest level since 2001.
But policymakers have signaled that their rate-hike campaign has finally come to an end – and that they could soon pivot to reducing rates.
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"The job market holds the keys to future Fed policy," said Jeffrey Roach, chief economist at LPL Financial. "In addition to the solid job market, uncertainty over the impact from Red Sea shipping disruption adds pressure to the Fed as they prepare markets for rate cuts. As of now, markets expect only a 39% chance of a rate cut in March."
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)
Still, 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 number of Americans quitting their jobs, meanwhile, ticked lower to 3.4 million, or roughly 2.2% of the workforce, indicating that workers remain confident they can leave their jobs and find employment elsewhere.
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Switching jobs has been a windfall for many workers over the past year: Job-switchers saw their real hourly wage increase 6.6% in September, compared to a 5.3% pay increase for workers who stayed in the same job, according to recent Atlanta Fed data.
The report also indicated that layoffs were largely unchanged last month, hovering around 1.6 million.