Job vacancies rose in July, dashing hopes of a Fed cooling off


WASHINGTON – US job openings rose in July after three months of decline. This shows that despite the weakening economy and high inflation, employers are still urgently looking for workers.

The increase the government reported Tuesday will be a disappointment to Federal Reserve officials who are trying to cool jobs and the economy by raising short-term interest rates to slow borrowing and spending, which tend to fuel inflation. Federal Reserve officials hope their policies will primarily reduce job openings and help workers escape the pain of widespread layoffs and high unemployment.

There were 11.2 million job openings at the end of July, up from 11 million in June. The figures for June were also significantly revised upwards.

“The Fed has made little progress in closing the labor supply and demand gap,” Aneta Markowska, chief economist at investment bank Jefferies, said in a research report.

Reducing the high demand for workers to a level closer to the available supply will ease the pressure on businesses to pay higher wages to attract and retain workers. Wage increases have been passed on to consumers in the form of higher prices by many businesses, which has exacerbated inflation.

Job openings increased last month in retail, warehousing and shipping, professional services, and state and local education. Manufacturing and healthcare store openings declined.

The number of people who quit their jobs fell slightly to 4.18 million in July from 4.25 million in June, according to Tuesday’s report. People usually quit their jobs to get new jobs with higher wages. As a result, less retirees could ease the pressure on companies to raise wages. However, smoking cessation remained well above pre-pandemic levels and rarely exceeded 3 million people.

The data released on Tuesday also included a measure of layoffs that fell slightly in July. Despite high-profile reports of job cuts, the report reinforced the impression that most companies retained the majority of their employees.

Since the economy began to recover from the pandemic recession over two years ago, job openings have increased. Employers sought to add workers quickly as demand recovered quickly.

When COVID-19 hit and imposed widespread shutdowns in March and April 2020, businesses cut 22 million jobs. But not all workers have returned as the economy has recovered. Fewer people are working or looking for work now compared to pre-pandemic trends. Job openings hit a record high of 11.9 million in March before falling for three months. It had never crossed 8 million before the pandemic hit.

The latest figures suggest that demand for workers remains high. On Friday, the government is due to release its monthly jobs report, which is expected to show 300,000 jobs have been added, a slowdown from the previous month when jobs topped 500,000, but still healthy. is a number.

Fed Chairman Jerome Powell and other policymakers say they want to reduce job openings without significantly increasing unemployment. Former Treasury Secretary Larry Summers and former International Monetary Fund chief economist Olivier Blanchard argue that such an outcome is unlikely.

Federal Reserve Board member Christopher Waller said last month, “Reducing vacancies (jobs) can be done without a significant loss of employment, which is like the soft landing Fed officials expect. It’s something,’ he said.

The Federal Reserve is about to set a so-called soft landing (an economic slowdown that lowers inflation) to near its current 40-year high without triggering a recession.

However, Blanchard and Summers argue that, historically, there has never been a decline in job openings without an increase in layoffs.

Earlier this month, Mr. Blanchard called the Federal Reserve’s efforts to cut job openings without increasing layoffs a “vain hope,” adding, “It’s sad that there’s no such thing as an economic slowdown without rising unemployment. It’s true,” he wrote.



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