US Job Openings Rise in September as Fed Plans Another Large Rate Hike

A "Now Hiring" sign in front of a Chipotle restaurant in Washington on Oct. 7, 2022. (Anna Moneymaker/Getty Images)

Job openings in the United States continued to expand last month, despite efforts by the Federal Reserve to slow the economy down and lower record high inflation with massive interest rate hikes.

There were 10.7 million job openings at the end of September, a rise from August’s reading of 10.1 million, according to the Bureau of Labor Statistics.

The September readings for the department’s monthly Job Openings and Labor Turnover Survey (JOLTS) partially reversed a decline in August, while job openings increased in all four U.S. regions.

The number of available jobs has been around 10 million for the past 16 consecutive months, well above pre-pandemic figures.

There were only 7.7 million open positions in February 2020, the highest on record up to that point.

“Stronger than expected job openings reported for the end of September at 10.7 million, UP from 10.3 million in the previous month. JOLTS strength continues to underscore imbalance between supply and demand for labor, contrary to what the Federal Reserve wants to see,” said Mark Hamrick, a senior economic analyst at Bankrate in a tweet.

Hamrick also told Fox Business, that “on the other hand, labor market strength bolsters job security, a positive for workers and those aspiring to work.”

Balancing Rate Hikes Versus Raising Unemployment

The Fed has been closely monitoring the Labor Department, in an attempt to measure growth in the extremely tight labor market, while it tries to cool it down.

The higher-than-expected job figures from last month may push policymakers into raising interest rates even further, as they currently gather for a two-day policy meeting.

Chairman Jerome Powell admitted that higher interest rates could “give rise to increases in unemployment,” but it is worth the sacrifice, reported Fox Business.

“We think we need to have softer labor market conditions,” he said.

“And if we want to set ourselves up really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn’t,” Powell concluded.

U.S. Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee (FOMC) at the headquarters of the Federal Reserve in Washington on Sept. 21, 2022, . (Drew Angerer/Getty Images)

The Fed is expected to deliver another 75 basis-point hike on Nov. 2, as it attempts to reduce demand for labor and slow the overall economy in order to bring inflation down to its 2 percent target.

The Fed has already pushed through three consecutive monthly 75-basis-point rate hikes.

Policymakers have so far raised the benchmark policy rate from near zero in March to between 3.00 to 3.25 percent, the fastest tightening since the 1990s.

“We continue to expect a downshift to a 50 basis points hike in December, but resilient data raises further the risk that any slowdown is paired with hawkish communication that policy rates could rise for longer and eventually reach higher levels that are then sustained,” Andrew Hollenhorst, chief economist at Citigroup, told Reuters.

Meanwhile, the number of new hires fell to 6.1 million, but the number of those leaving their jobs decreased to 5.7 million.

Workers Continue Search For Better Employment

The number of Americans quitting their jobs for better employment opportunities remained steady at 4.1 million, which is about 2.7 percent of the total workforce.

This is slightly below this year’s record high of 4.5 million Americans, but well above the pre-pandemic level of about 3.6 million.

The ability of workers to switch jobs has been beneficial for many Americans over the past year.

Employees who leave for a better job, witness an average 6.7 percent rise in annual wage growth, in contrast to the 4.9 percent of workers who have stayed put, according to the Federal Reserve Bank of Atlanta.

Meanwhile, analysts are eagerly awaiting the release of the October jobs report on Nov. 4, which is projected to show only 200,000 new hires, after a gain of 263,000 in August.

The unemployment rate is expected to rise higher to 3.6 percent, according to economists surveyed by Reuters.

Reuters contributed to this report.