Job Vacancies Remain High as Fed Looks to Keep Up Pressure

There were 10.46 million job vacancies on the last day of November, according to the latest Job Openings and Labor Turnover Survey.

The number of job openings was little changed from 10.51 million in October, the U.S. Bureau of Labor Statistics reported today. Over the course of November, the number of hires and total separations also changed a little at 6.1 million and 5.9 million, respectively. 

The figure was higher than estimates from a Bloomberg survey of economists and above the 10 million forecast by FactSet. The elevated number of job openings demonstrates the labor market’s resilience, which could impact the Federal Reserve’s coming decisions.

Consequences For the Fed

As a share of the labor force, job openings remained at 6.4%, indicating demand for employment remained high as companies looked for workers to fill positions. Despite concerns over a looming recession, such a high number of job openings suggests the economy is not yet there. Typically businesses phase out job postings as the economy begins to falter.

This could be consequential for the Federal Reserve’s efforts to bring down inflation, which has been driven partially by rising wages. The number of openings illustrates a jobs market where employers’ demand for workers far outstrips supply. Although hiring has moderated, it remains solid, while the number of layoffs has stayed low. 

This persistent imbalance has contributed to consistently robust payroll advances. As the wage raises continue to contribute to inflation, the Fed will likely be compelled to maintain its monetary tightening. 

Market Reactions and Expectations

ough mild, markets reacted somewhat negatively to the prospect of continued interest rate hikes. On the one hand, the S&P 500 fell after the report was released, while Treasury yields rose.

Cryptocurrency markets also took a dip in the immediate aftermath of the announcement, but have more than recovered since then. Markets are likely anticipating the release of non-farm payrolls data on Friday, which will show how many jobs the economy gained in December. Economists expect that the US economy will have gained around 200,000 jobs last month, according to Refinitiv.