Labor Market Still Too Strong for the Fed

MarketWatch (11/30/22) Bartash, Jeffry

Job openings declined to 10.3 million in October in another sign the U.S. labor market is cooling as the economy softens. Still, it doesn’t seem to be cooling as quickly as the U.S. Federal Reserve would like. Job listings are down from 10.7 million in September, according to the U.S. Department of Labor. Job postings have declined from a record 11.9 million in the spring but are still high. Yet the Fed wants the demand for labor to wane even more quickly to curb the upward pressure on wages that’s contributing to high inflation. There are 1.7 job openings for each unemployed worker, well above prepandemic levels of 1.2.

The number of people hired in October slipped to 6.0 million from 6.1 million—the lowest level in nearly two years. Companies aren’t filling as many jobs amid growing concerns about a potential recession. The number of job quitters dropped a bit to 4.0 million, but the figure is still unusually high. Quits have topped 4.0 million for 16 consecutive months. The quits rate among private-sector workers was unchanged at 2.9%. It peaked at 3.4% near the end of 2021. Layoffs remained low, but they have risen a bit in “information,” the category that includes technology workers and the media. Both industries have announced widespread layoffs in recent months.

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