The U.S. economy had far more vacant jobs at the end of July than economists expected, indicating that the Federal Reserve’s interest rate increases have not yet cooled the labor market.
There were 11.239 million job openings in the U.S. on the last day of July, the Department of Labor said on Monday.
Economists had been expecting 10.4 million openings, which would have been a decline of nearly 300,000 from June.
In addition to the much higher level in July, the June figure was revised up to 11 million from nearly 10.7 million, indicating that the job market remained hotter than thought in June.
The Fed has been raising its interest rate target in an effort to tame inflation, which has been running at the highest rate in four decades. Fed chairman Jerome Powell has said that bringing down the level of openings could help ease the tightness of the labor market without necessarily raising unemployment by that much
“There’s a path by which we would be able to moderate demand in the labor market and have vacancies go down without having unemployment going up,” Powell said in May.
The recent data shows that the U.S. economy is not on that path. In July, 528,000 workers were added to payrolls and the unemployment level dropped to 3.5 percent. The number of unemployed fell in July to 5.67 million. That puts the ratio of vacancies to unemployed just under two to one, nearly tied with the all-time record hit in march.
Quits, which have been running at a historically elevated level, were little changed at 4.2 million. This is also a sign that the labor market remains extremely tight as workers are more likely to voluntarily leave their job when they expect to find another easily or already have an offer.
In July, the number of layoffs and discharges was little changed at 1.4 million and the rate was unchanged at 0.9 percent. This is considered a very low level of layoffs and an indication that employers are hanging on to employees despite slowdowns in some parts of the economy.
Reporting from Breitbart.