WASHINGTON- US job openings unexpectedly rose in September, suggesting demand for labor remained strong, tempering financial market expectations that the Federal Reserve would dial back its aggressive interest rate increases in December.
With 1.9 job openings for every unemployed worker at the end of September, wage growth could remain elevated. But the Fed’s fight against inflation received a big boost from an Institute for Supply Management survey on Tuesday showing raw materials prices fell for the first time in 28 months in October. Supplier deliveries performance was the best since 2009.
The reports were published as Fed officials gathered for a two-day policy meeting. The US central bank is expected to deliver another three-quarters of a percentage point rate hike on Wednesday as it fights to cool demand for labor and the overall economy to bring inflation down to its 2 percent target.
“The good news of more job openings for everyone will be bad news for everyone if Fed officials become convinced they need to push interest rates even higher and faster than before,” said Christopher Rupkey, chief economist at FWDBONDS in New York. “It is a head scratcher where you have to wonder whether 10 million job openings can stop a recession from coming.”
Job openings, a measure of labor demand, increased 437,000 to 10.7 million on the last day of September, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, partially reversing August’s decline.
Economists polled by Reuters had forecast 10.0 million vacancies. The jobs-workers gap rose 0.4 percentage point to 2.6 percent of the labor force or 4.9 million workers.
There were 215,000 more job openings in the accommodation and food services industries, where employment remains below pre-pandemic levels.
Vacancies in healthcare and social assistance increased by 115,000, while the transportation, warehousing and utilities sector reported an additional 111,000 unfilled jobs.
But job openings decreased by 104,000 in wholesale trade. There were 83,000 fewer vacancies in the finance and insurance industry, likely reflecting a downturn in the housing market as higher borrowing costs stifle demand.
The job openings rate increased to 6.5 percent from 6.3 percent in August. It was 0.8 percentage point below its peak in March. Job openings increased in all four regions.
Hiring fell to 6.1 million from 6.3 million in August. Hiring decreased by 57,000 in the durable goods manufacturing industry and fell by 40,000 in state and local government education.
