US job openings rise to six-month high on business services
The job market appears to be on better footing and inflation has proved stubborn in recent months
US JOB openings rose to a six-month high in November, boosted by a jump in business services while other industries showed more mixed demand for workers.
Available positions increased to 8.1 million from an upwardly revised 7.8 million in October, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as Jolts, showed on Tuesday (Jan 7). The figure exceeded all estimates in a Bloomberg survey of economists.
The advance was led almost entirely by openings at professional and business services – which stand at an almost two-year high – as well as finance and insurance. Meantime, accommodation and food services and manufacturing reduced postings.
The recent uptick in vacancies represents a break from an almost three-year downtrend that raised concerns of deterioration in the labour market and laid the ground for a series of Federal Reserve interest-rate cuts. Now, the job market appears to be on better footing and inflation has proved stubborn in recent months, scaling back expectations for how much more policymakers will lower rates this year.
At the Fed’s last meeting in December, chair Jerome Powell said the labour market is cooling, but “in a gradual and orderly way”, and he signalled that the central bank’s focus has returned firmly to inflation. Minutes of that gathering will be released on Wednesday.
A separate survey on Tuesday showed growth at service providers quickened in December, reflecting stronger business activity that helped push a price measure to the highest since early 2023.
The report precedes Friday’s employment data, which is forecast to show employers moderated hiring in December to a level that’s still healthy. The unemployment rate probably held at 4.2 per cent.
Layoffs were relatively unchanged at a low level, while the pace of hiring cooled and matched the lowest since April 2020, the Jolts data showed.
The quits rate declined to 1.9 per cent, also matching the lowest since early in the pandemic and was fairly broad across industries. That suggests more people are losing confidence in their ability to find a new job.
The number of vacancies per unemployed worker, a ratio the Fed watches closely, held at 1.1, in line with pre-pandemic levels. At its peak in 2022, the ratio was two to one.
Some economists have questioned the validity of the Jolts data, in part due to the survey’s low response rate and heavy revisions. A similar index by job-posting site Indeed showed openings rose slightly in November. BLOOMBERG
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