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Economic Report: U.S. job openings jump to 10.7 million — labor market still too hot for the Fed


The numbers: Job openings in the U.S. rose to 10.7 million in September in a sign that a scorching-hot labor market hasn’t cooled off as much as the Federal Reserve would like.

Job listings increased from 10.3 million in August, the Labor Department said Tuesday.

The number of job openings is viewed as a way to assess the strength of the labor market and the broader economy. Although companies still list a high number of open jobs, the total has fallen off from a record 11.9 million in March.

Yet the Fed wants to see the mismatch between high job openings and the relative scarcity of available workers shrink at a faster pace.

Senior Fed officials worry the labor shortage is causing wages to spike and add to already high inflation.

Key details: The number of people hired in September slipped to 6.1 million from 6.3 million to mark the lowest level in 15 months. That might be a sign businesses aren’t rushing to fill job openings anymore.

The number of job quitters dipped to 4.1 million, but it’s still unusually high. Quits have topped 4 million for 15 months in a row. People quit more often when they think it’s easy to get a better job.

The so-called quits rate among private-sector workers fell a tick to 2.9%. It peaked at 3.4% near the end of 2021.

The number of open jobs per unemployed worker edged up to 1.9. The Fed is watching the number closely and would like it to fall closer to the historical norm of around 1.2 or so.

Big picture: The central bank is quickly raising interest rates to try tame intense price pressures. The still-high number of job openings is likely to be viewed as a worrisome sign.

Many economists believe the Fed will have to raise rates so high to rein in inflation that another recession is likely in 2023.

Looking ahead: “The Fed is looking for a more persistent cooling in order to add some slack to the labor market, and this is a step in the wrong direction,” said economist Katherine Judge of CIBC Economics.

Market reaction: The Dow Jones Industrial Average

and S&P 500

gave up their gains in Tuesday trades after the report.

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