U.S. job openings fell slightly at the beginning of the year, but remain historically high 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 10.8 million job openings in January, a declined from the upwardly revised 11.2 million openings reported in the previous month. Economists surveyed by Refinitiv expected openings to fall to 10.5 million.
The number of available jobs has now topped 10 million for 15 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.
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.
US COMPANIES OFFERING RECORD-HIGH RAISES TO RETAIN WORKERS, KEEPING PRESSURE ON INFLATION
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 have so far approved eightm straight rate hikes, lifting the benchmark federal funds rate well into restrictive territory, and have shown no signs of pausing.
The central bank’s rate-setting committee meets next later this month.
Markets initially expected the Fed to continue raising rates at a quarter-point pace, but a slew of hotter-than-expected economic data reports in recent weeks — including the blowout January jobs report and disappointing inflation data that pointed to the pervasiveness of high consumer prices — has raised the specter of a higher peak rate or steeper increases.
FED SIGNALS MORE INTEREST RATE HIKES NEEDED TO FIGHT STICKY INFLATION
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Chairman Jerome Powell said Tuesday while testifying before the Senate Banking Committee. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
Officials will be closely dissecting the February jobs report on Friday morning for additional insights about the nation’s labor market. The report is expected to show the unemployment rate held steady at 3.4%, a half-century low, and that employers added 203,000 new jobs.
The number of Americans quitting their jobs, meanwhile, fell slightly to 3.9 million, or roughly 2.5% of the workforce, indicating that workers remain confident they can leave their jobs and find employment elsewhere.
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Switching jobs has been a windfall for many workers over the past year: Roughly 49% of job-switchers saw their real hourly wage increase faster than inflation last year, compared with just 42% of workers who stayed in the same job, according to Atlanta Fed data.