The number of available jobs in the U.S. plummeted in August compared with July as businesses grow less desperate for workers, a trend that could cool chronically high inflation.
Altogether, the data suggested that even as companies take down job postings, they aren’t cutting workers or slamming the brakes on adding jobs.
“Employers are thinking about who they don’t need to hire, but not thinking about who they need to lay off,” said Layla O’Kane, a senior economist at labor analytics firms Lightcast., down a huge 10% from 11.2 million openings in July. In March, job openings hit a record of nearly 11.9 million.because it is a potential sign that the Fed could slow its rapid pace of rate hikes, though most economists said that it would take more than one report to change the Fed’s trajectory. The U.S.
than its previous increases, a rare sign of moderation as central bankers around the world rapidly boost rates to fight rising prices.rapidly raised its key short-term interest rate to a range of 3% to 3.25%Federal Reserve officials are hoping to reduce the demand for workers by raising rates, which pushes up the cost of mortgages, auto loans, and borrowing for businesses. While workers typically welcome larger raises, the Fed sees the current pace of wage increases — at about 6.
Chair Jerome Powell and other Fed officials hope that their interest rate hikes — the fastest in roughly four decades — will cause employers to slow their efforts to hire more people. Fewer job openings should reduce the pressure on companies to raise pay to attract and keep workers. Smaller pay raises, if sustained, could ease inflationary pressures.
“This helps bring that inflation pressure down and reassures the Fed that maybe there is a road out of this without dramatically pushing up the unemployment rate,” said Derek Tang, an economist at LHMeyer, an economic research firm.. Still, he and other Fed officials have held out hope for what they call a “soft landing” — in which the economy slows enough to curb inflation but not so much as to cause a recession.
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