U.S. job openings unexpectedly surged at the end of 2022 as demand for workers increased, despite an aggressive campaign by the Federal Reserve to raise interest rates and cool the labor market.
The Labor Department said Wednesday that there were more than 11 million job openings in December, a marked increase from the 10.46 million reported the previous month. Economists surveyed by Refinitiv expected openings to fall to 10.25 million.
The number of available jobs has now topped 10 million for 14 consecutive months; before the pandemic began in February 2020, the highest on record was 7.7 million. There are roughly 1.7 jobs per unemployed American.
US COMPANIES OFFERING RECORD-HIGH RAISES TO RETAIN WORKERS, KEEPING PRESSURE ON INFLATION
The Federal Reserve closely watches these figures as it tries to gauge labor market tightness and wrestle inflation under control. The stronger-than-expected figure indicates that demand for employees still far outpaces the supply of available workers.
“The job openings report is a bit of an outlier – labor market data have been sending mixed messages recently,” said Bill Adams, chief economist for Comerica Bank. “The truth is probably that the job market was running incredibly hot in early 2022 and has lost momentum since then, but with the effects varying pretty widely across sectors and geographies.”
INFLATION STILL OUTSTRIPPING WAGES IN MOST US CITIES
The Fed has responded to the inflation crisis and the extremely tight labor market by raising interest rates at the fastest pace in decades. Officials approved seven rate hikes last year, lifting the benchmark federal funds rate well into restrictive territory, and have shown no signs of pausing. Policymakers are widely expected to approve an eighth straight increase at the conclusion of their two-day meeting on Wednesday.
The number of Americans quitting their jobs, meanwhile, was largely unchanged at 4.1 million, or roughly 2.7% of the workforce, indicating that workers remain confident they can leave their jobs and find employment elsewhere.
Switching jobs has been a windfall for many workers over the past year, with employees seeing an average 7.7% annual wage growth rate in November from the previous year – up from the 5.5% received by workers who do not switch jobs, according to the Atlanta Fed.
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