Despite a decline in May, the number of job opportunities in the United States was still strong enough to demonstrate the resilience of the American labour market in the face of considerably increased interest rates. Despite the cost of borrowing becoming higher, employers are still willing to create job openings and invest in expanding their workforce.
Job Openings Dip : Labor Market Remains Strong Amid Federal Reserve’s Efforts to Curb Inflation
According to the Labour Department, employers have advertised 9.8 million job openings, down from 10.3 million in April. However, the number of layoffs decreased marginally, and more Americans left their jobs, indicating they believed they might find employment with better pay or working conditions elsewhere.
Jobs in healthcare, insurance, and finance became less available. However, there were more positions in government and education.
According to Nick Bunker, research director at the Indeed Hiring Lab, the Job Openings and Labour Turnover Survey (JOLTS) of the Labour Department “continues to reflect a gradually slowing yet still-robust labour market, one that is cooler than a year ago but still hot.” The need for new hiring, he continued, “remains high, and firms are still hanging onto the personnel they have.
Despite the Federal Reserve’s strong push since then to chill the American labour market and battle inflation that last year touched four-decade highs, monthly job vacancies remain high by historic standards – they had never reached 8 million until 2021. Since March 2022, the Fed has increased its benchmark short-term interest rate ten times.
Rising Borrowing Rates Impact Job Openings and Inflation
The impact of the rising borrowing rates is as follows: The number of job opportunities each month has decreased from its all-time high of 12 million in March 2022, a sign of sluggish economic development. Inflation is also declining: Although down from a year-over-year peak of 9.1% in June 2022, consumer price inflation was still beyond the Federal Reserve’s 2% objective in May.
For years, economists have forecast that the US will enter a recession this year. However, the labour market’s continued resilience has caused others to wonder if a collapse is really impending.
This year, employers have created a solid 314,000 jobs each month, and the unemployment rate, which was 3.7% in May, is not far from a half-century low.
The June employment data from the Labour Department is released on Friday. FactSet, a statistics company, polled forecasters who predicted that payrolls increased by another 205,000 last month and that the jobless rate decreased to 3.6%.
