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U.S. job openings after surprise rise, keep pressure on Fed

(Bloomberg) – U.S. job openings unexpectedly rebounded in September amid low unemployment, likely fueling further wage increases and adding pressure on the Federal Reserve to extend its aggressive campaign against inflation.

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The number of vacancies rose to 10.7 million in September from a revised 10.3 million a month earlier, the Department’s Job Openings and Labor Turnover Survey showed on Tuesday. labor, or JOLTS. The median estimate from a Bloomberg survey of economists called for a drop to around 9.8 million.

The surprise upturn in job vacancies highlights a relentless demand for workers despite rising economic headwinds. The lingering imbalance between labor supply and demand continues to support solid wage growth, adding to widespread price pressures and bolstering expectations of another big rate hike on Wednesday.

The latest increase in openings erased much of the August decline, which at the time suggested a noticeable moderation in labor demand.

“After the shock of last month’s report, the September JOLTS data returns to a familiar story: demand for workers remains robust,” Nick Bunker, head of economic research at Indeed Hiring Lab, said in a note. “Based on all key indicators in this report, the labor market is resilient.”

Following the release, the S&P 500 fell and the two-year Treasury yield rose.

The largest increases in job vacancies were seen in accommodation and food services, health care, and transportation, storage, and utilities.

What Bloomberg Economics says…

“Job openings did not decline in September despite clear signs of slowing economic momentum, complicating the picture for a Fed looking to shed excess heat from the labor market.”

– Eliza Winger, Economist

To read the full note, click here

The job openings ratio rose in September. There are now around 1.9 jobs available for every unemployed person, down from 1.7 in August.

Fed officials are watching this ratio closely and have pointed to the high number of job vacancies as a reason the central bank may be able to cool the labor market – and therefore inflation – without result in soaring unemployment.

Some 4.1 million Americans quit their jobs in September, down slightly from the previous month. The quit rate, a measure of voluntary job departures as a proportion of total employment, held steady at 2.7%.

Hiring fell to around 6.1 million from 6.3 million a month earlier, suggesting companies are struggling to fill vacancies. Layoffs, meanwhile, fell slightly.

The data comes ahead of Friday’s monthly jobs report, which is currently expected to show U.S. employers added about 190,000 workers to payrolls in October. Economists expect the jobless rate to climb to 3.6% and the average hourly wage to show another solid gain.

–With help from Jordan Yadoo.

(Adds comments from economists)

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