U.S. employers announced 9 million job openings in December, a slight increase from November, showing that the U.S. job market remains resilient despite the headwinds of rising interest rates. This is a new sign that there is.
The number of job openings rose from 8.9 million in November, but the figure itself was revised upward in a government report on Tuesday.
The number of job openings has been gradually but steadily decreasing since reaching a record high of 12 million in March 2022.
But they remain at historically high levels, with monthly openings never exceeding 8 million until 2021.
Still, in a warning sign, layoffs increased in December.
And the number of Americans who have quit their jobs, a sign of relative confidence in their ability to find a better job, has fallen to its lowest level since January 2021.
The U.S. economy and job market have remained surprisingly resilient despite sharp increases in interest rates, leading to higher borrowing rates for consumers and businesses.
Fed policymakers raised the benchmark interest rate 11 times between March 2022 and July 2023, bringing the rate to about 5.4%, the highest level in about 23 years.
The Fed wants the job market to subside from the red-hot levels of 2021 and 2022, allowing companies to raise wages to attract and retain employees and pass those costs on to customers through higher prices. We would like to reduce the pressure of passing on the burden to the public.
Although the rise in employment rates has contributed to the slowdown in employment, the pace of employment growth remains relatively healthy. U.S. employers added 2.7 million jobs last year, down from 4.8 million in 2022 to a record 7.3 million in 2021.
When the government releases its January jobs report on Friday, it is expected to show employers will add a robust 177,000 jobs, according to a survey of forecasters by data firm FactSet. ing.
The job market has cooled almost painlessly through a decline in the number of job openings.
Despite the wave of high-profile layoffs, the number of layoffs across the economy remains relatively small.
The unemployment rate is below 4% for 23 consecutive monthsIt was the longest such streak since the 1960s.
And the number of people applying for unemployment benefits to replace layoffs remains unusually low.
At the same time, inflation has slowed sharply after peaking in mid-2022, but remains above the central bank’s 2% target.
The Fed has signaled it expects to reverse course and cut rates three times this year, but it plans to keep rates on hold after its latest policy meeting, which ends on Wednesday.
Financial markets expect the first interest rate cut to be implemented as early as March, but the continued strength in the job market may make Fed policymakers wary of taking action before mid-year. be.
“These data, which show that worker demand remains strong, do not support an imminent rate cut,” said Rubera Farooqi, chief U.S. economist at High Frequency Economics. “They support a cautious approach going forward so that policymakers can be confident that inflation will reach the 2% target,” he said.
