The data complicates the rate outlook.
The surge in vacant slots could put pressure on the Fed to raise interest rates even further.
The government-calculated statistical relationship between high vacancies and low unemployment rates has been described by Jerome H. Frequently quoted by Chairman Powell of the Federal Reserve. Demand for workers significantly exceeds supply of available workers and is in balance. ”
But while some economists remain unsatisfied with progress in price containment, others believe that the reliance on job openings as a core indicator of labor market equilibrium has led the Fed to push corporate and household borrowing costs too far. I am concerned that it will lead to the high price level for a long period of time. A more severe recession than necessary.
Skanda Amarnath, executive director of Employ America, a nonprofit that helps tight labor markets, said in a memo, “Turnover is almost back to pre-pandemic levels, and hiring is already back to pre-pandemic pace. There are,” he said. “The JOLTS data should not dramatically affect this broader assessment of labor market tightness, but it will be marginally important for the Fed’s own perception of labor market heat.”
Some question how much weight should be given to this report.
Job vacancies, as measured by the government, peaked at around 12 million in March 2022 and have declined overall. Over the past year, strong hiring of already listed positions combined with weaker business confidence has led to a decline in new listings. But April’s rally is at least a breather to recent trends.
Some economists think the JOLTS report should be taken with a grain of salt. Gregory Daco, chief economist at EY-Parthenon, said the increase in listings may reflect a rebound in summer employment in the services sector, but said: I want to see the moon,” he added.
The report is based on a survey of approximately 21,000 non-farm companies and government agencies. Goldman Sachs’ economic research team noted that response rates to the JOLTS report have plummeted since the start of the pandemic, and “these findings point to JOLTS as a ‘true’ level of job openings today.” argues that they do not treat each other equally.”
The May jobs report will be the next indicator.
The Labor Department’s May jobs report on Friday will provide a more complete picture of the labor market ahead of the Fed’s meeting of policymakers on June 13-14.
Economists surveyed by Bloomberg expect the data to add 195,000 jobs on a seasonally adjusted basis, down from 253,000 in the first report in April. The unemployment rate hit 3.4% in April, the lowest since 1969, but is expected to rise to 3.5%, slowing month-on-month wage gains.