US job openings fell in August 2022: Government report

There were 10.1 million jobs advertised on the last day of August, the government said in a new report, down 10% from 11.2 million jobs in July.

WASHINGTON – The number of jobs available in the US fell sharply in August compared with July, a sign that businesses can further reduce hiring and potentially cool chronically high inflation.

The government said on Tuesday there were 10.1 million jobs advertised on the last day of August, down 10% from 11.2 million in July. In March, the number of jobs hit a record level of nearly 11.9 million.

The number of layoffs increased in August but remained at a historic low, according to the report, known as the Employment and Labor Revenue survey, or JOLTS. And slightly more people quit their jobs, in most cases likely to find better jobs elsewhere.

The sharp drop in job openings will be welcomed by the Federal Reserve, which hopes to reduce demand for workers by raising key short-term interest rates. While workers generally welcome larger increases, the Fed considers the current rate of wage growth – about 6.5% a year, by some measures – to be unsustainably high and a key driver of inflation. .

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Chairman Jerome Powell and other Fed officials hope that their rate hikes – the fastest in about four decades – will slow employers’ efforts to hire more people. Fewer jobs could therefore reduce pressure on companies to raise wages to attract and keep workers.

“This helps ease inflationary pressures and reassures the Fed that there may be a way out of this without increasing the unemployment rate,” said Derek Tang, economist at LHMeyer, an economic research firm. significantly”.

Smaller wage increases, if sustained, should ease inflationary pressures. In an attempt to combat the worst inflation in 40 years, the central bank raised its key short-term interest rate to between 3% and 3.25%, up sharply from near zero in recent March.

Powell has warned that a central bank rate hike will likely lead to higher unemployment and a potential recession. Still, he and other Fed officials hold out hopes of what they call a “soft landing” – in which the economy slows down enough to contain inflation but not too much to trigger a recession.

Christopher Waller, a member of the central bank’s Board of Governors, has argued that a Fed rate hike could reduce job openings and thus inflationary pressures without causing job losses across the board. widespread. But former Treasury Secretary Larry Summers and former IMF chief economist Olivier Blanchard wrote that such an outcome is unlikely, based on past trends. They found that when job openings fall, layoffs and unemployment typically increase.

Tuesday’s figures come the same week that a key jobs and unemployment rate report is due on Friday. Economists forecast that employers added 250,000 jobs in September and the unemployment rate remained at 3.7% for a second straight month.

https://www.king5.com/article/news/nation-world/us-job-openings/507-2141c9e9-46ed-4764-ae5c-cc46f8d5efed US job openings fell in August 2022: Government report

Edmund DeMarche

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