US job openings surge past 11 million as Fed Zeros In on Labor

US job openings surge past 11 million as Fed Zeros In on Labor

At the end of 2022, Vacancies at US employers unexpectedly increased, illustrating a solid appetite for labor that the Federal ReserveFederal Reserve sees as one of the last hurdles to bring down inflation.

In December, the Labor Department s Job Openings and Labor Turnover Survey showed that the number of available positions went to a five-month high of just over 11 million from 10.4 million a month earlier, the Labor Department s Job Openings and Labor Turnover Survey, or JOLTS, at a five-month high of just over 11 million. Since July 2021, the increase was the largest since July 2021 and reflected a jump in vacancies in accommodation and food services.

The openings number exceeded all economists' estimates in a Bloomberg survey that had a median projection of 10.3 million. The S&P 500 fell and Treasury yields went up after the report.

The figures are consistent with a jobs market where labor demand far exceeds supply and poses a risk of upward pressure on wages that could reignite inflation.

That is likely to be a big talking point from Fed Chair Jerome Powell as he speaks at the end of the central bank's first policy meeting of 2023. Officials are expected to slow the pace of interest-rate hikes to a quarter point.

There were more job openings in retail trade and construction. There were fewer vacancies in the information sector, which includes many tech jobs.

In December, the ratio of openings to unemployed rose to a near record high of 1.9 from 1.7 a month earlier. It was around 1.2 before the pandemic.

Fed officials watch the ratio closely and point out the elevated number of job openings as the reason why the central bank may be able to cool the labor market without an ensuing surge in unemployment.

Many economists expect Fed tightening to push the economy into a recession over the next year, and for unemployment to rise over the next year.

The ratio of jobs openings to unemployed is one of the most closely watched labor market metrics for the Fed, and it is moving in the wrong direction. While wage growth may be slowing down, it is not clear whether it is decelerating to a level consistent with the price target of the Fed. The JOLTS report found that the quits rate, which measures voluntary job leavers' share of total employment, held at 2.7% or around 4.1 million Americans.

In the fields of health care, retail trade and construction, the hiring went up. Layoffs also went up in the mean time.

Many companies that have been shedding workers are slashing bonuses to reduce costs. Employment costs rose at a slower than expected pace in the closing months of 2022, a sign that the labor market is cooling, according to data released Tuesday.

The job market is still tight by several measures. Applications for unemployment benefits are around the pre-pandemic levels, and the January jobs report at week s end is expected to show still historically low unemployment and steady hiring.

There was a moderation in private hiring last month, according to separate figures Wednesday. Payrolls rose at the slowest pace in two years, largely due to the inclement weather, according to the ADP Research Institute.

Manufacturing continues to struggle in the middle of the day. The Institute for Supply Management's gauge of factory activity fell for a fifth month in January to the lowest level since May 2020.

After 30 Years, the King of ETFs Faces a Fight for Its Crown.