Fed disappointed with job data
2022.11.30 12:00
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Fed disappointed with job data
Budrigannews.com – In October, job openings in the United States decreased slightly, moving one closely watched indicator of the labor market in the direction that officials at the Federal Reserve hope to see as they consider slowing the pace of future interest rate increases.
However, there was only modest progress, with job openings decreasing from approximately 10.6 million to 10.3 million and the ratio of open jobs to unemployed people decreasing from 1.85 to 1.7.
That’s better than July’s nearly 2-to-1 ratio, but it’s still a lot worse than the roughly 1.2 jobs per unemployed person in the years before the COVID-19 pandemic, when the unemployment rate was similar to October’s 3.7% but wage gains were thought to be in line with the 2% inflation goal set by the US central bank.
The ratio, which Fed Chair Jerome Powell frequently cites, has also been virtually unchanged for three months.
As a measure of worker leverage in the economy, a separate estimate of the number of people quitting their jobs also decreased, albeit only slightly.
The general consequences of the most recent Employment opportunities and Work Turnover Overview showed numbers that were “still exceptionally raised from pre-pandemic levels,” Scratch Shelter, financial exploration chief for North America at the Without a doubt Recruiting Lab, composed on Twitter.”
The quits rate remained at a moderate level, but the descent is not particularly rapid. Nominal wage growth would remain robust if job switching remained robust.
As the Fed works to slow the economy as a whole, JOLTS has become a major topic of discussion. Powell frequently uses the number of job openings and job departures as a gauge of how tight the US labor market is.
A lot of it also plays a role in the ongoing debate about whether the Fed can slow the economy and lower inflation at the same time that there is such a high demand for workers without increasing the number of unemployed people or even decreasing the number of open jobs.
The Beveridge Curve, which compares the number of job openings and the rate of unemployment, has made little progress toward resolving this disagreement so far.
The Fed is closely monitoring the development of the job market for indications that the rate hikes delivered this year are beginning to take hold as it continues its battle against high inflation, which is running about three times the 2% target.
Friday’s employment report from the United States Labor Department will provide Fed officials with important information for their December 13-14 policy meeting.
Financial specialists surveyed by Reuters expect an increase of 200,000 positions for the month, one more step towards the kind of month to month work development seen before the pandemic and away from the outsized increases of the most recent two years.
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