Job openings hovered at a near-record high in February, little change from the previous month, continuing a trend that Federal Reserve officials see as a driver of inflation.
There were 11.3 million jobs available last month, matching January’s figure and just below December’s record high of 11.4 million, the The Department of Labor announced on Tuesday.
The number of Americans quitting their jobs was also historically high, at 4.4 million, down from 4.3 million in January. More than 4.5 million people arrested in November, most on cases dating back two decades. Many people take advantage of many opportunities to change jobs, often for higher pay. The vast majority of those who leave do so to take up another position.
Tuesday’s report is separate from the government’s monthly jobs report, which in February showed employers added a solid 678,000 jobs.
The data “shows the labor market remains torrid,” Stephen Stanley, chief economist at Amherst Pierpont, said in a research note. “In a month when the economy added 678,000 jobs, the number of vacancies fell by only 17,000. This speaks to the depth of supply employers have for the workforce. artwork.
The disproportionate number of job vacancies and quits contributed to runaway inflation, as many companies had to raise wages to attract and retain workers. In February, there were 1.8 openings for every unemployed person. Before the pandemic, there were generally more unemployed people than job vacancies.
The unemployment rate, at 3.8%, is close to the pre-pandemic level of 3.5%, which was the lowest in five decades. And there are still several million fewer people working or looking for work than before the pandemic, forcing employers to compete for a smaller labor pool.
Because of these trends, Federal Reserve Chairman Jerome Powell has singled out overtures and quits as a key measure of labor market health and a target for Fed interest rate policies. Powell said the central bank hopes to reduce the number of available jobs to curb wage increases and price inflation.
“If you just reduced the number of job openings … you would have less upward pressure on wages,” Powell said. “We need to use our tools to bring supply and demand back into alignment.
As employers desperately seek workers, wages and salaries rose 4.5% in 2021, the fastest pace in at least two decades. Many companies have, in turn, charged their customers more to cover higher labor costs.
Inflation jumped 7.9% in February from a year earliera four-decade high.
Earlier this month, the Fed said to have raised its short-term interest rate for the first time in four years, to about 0.375%, to contain inflation. Further rate hikes are expected this year, including potentially one or more half-point increases.
Powell’s hope is that by cutting job openings and slowing wage gains, the Fed can bring inflation down without causing widespread layoffs and pushing up unemployment. Economists are generally skeptical, however, that the Fed can achieve such a “soft landing” for the economy. They fear that the Fed’s rate hikes will lead to job losses and potentially even a recession.
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