US job postings unexpectedly rose in August, another sign that the US labor market remains strong despite rising interest rates, perhaps too strong for inflation fighters at the Federal Reserve.
American employers posted 9.6 million job openings in August, up from 8.9 million in July and the first increase in three months, the Labor Department reported Tuesday. Economists expect another 8.9 million vacancies. The number of layoffs and people quitting their jobs — a sign of confidence in their prospects — remained virtually unchanged from July.
Nick Bunker, head of economic research at Indeed Recruiting Lab, said most of the increase in job openings in August came from one sector: professional and business services. “Yes, the labor market is still very hot,” he said, “but it’s not boiling again.”
The Federal Reserve wants the US labor market to cool, reducing pressure on companies to raise wages, which could lead to higher prices. The central bank has raised its reference rate 11 times since March 2022 to curb inflation.
Fed Chair Jerome Powell expressed hope that hiring would be moderated in the least painful way possible: with fewer vacancies and fewer job jumps than through layoffs.
The strong employment data sent shockwaves through US markets as many investors saw it as increasing the likelihood that the Federal Reserve would take more aggressive action. The Dow Jones fell 100 points in a second.
Currently, the economy is working together. Hiring and firing fell from their 2022 highs, while the unemployment rate (3.8% in August) remained near its lowest level in half a century. And inflation, which hit a four-decade high by mid-2022, slowed sharply last year, raising hopes that the Federal Reserve will achieve a so-called soft landing — that is, raising at rates sufficient to slow the rise in prices without the economy going into recession.