The good-news-is-bad-news narrative continued Tuesday, as a new report showed job openings expanding, thus furnishing fresh evidence that the economy has failed to slow as much as the Federal Reserve wants as it seeks to curb inflation.
The number of open jobs in the U.S. soared in August, far above projections. The latest Job Opening and Labor Turnover Survey, or JOLTS report, issued Tuesday by the Bureau of Labor Statistics, showed 9.6 million jobs open at the end of August, an increase from the 8.8 million job openings reported for July.
The JOLTS news precedes the much-anticipated September employment report, due out Friday. Employment in August moved upward, while the jobless number remained low, up only slightly to 3.8%, from 3.5% in July.
The strong JOLTS report was a surprise to Wall Street, which had expected 8.8 million openings in August, about even with the July number. The S&P 500 slid 1.4% for the day, also pushed by a jump in the 10-year Treasury yield to 4.80%, up from 4.68% on Monday and part of a steady escalation since April.
“A cooling labor market was expected to emerge, but the August job openings data showed a large pickup with vacancies,” commented Edward Moya, a senior market analyst for the Americas at currency trading platform OANDA Corp., in a statement.
Fed Chair Jerome Powell noted recently that the hot jobs market was a troubling factor for the central bank. In his September 20 press conference, he remarked that “although the jobs-to-workers gap has narrowed, labor demand still exceeds the supply of available workers.” Openings are down from their record peak in March 2022 (12.03 million) but are still above historical averages. The Fed’s rate-setting Open Market Committee next meets on October 31-November 1.
“Hotter-than-expected job opening data today is not good news to stocks or bonds today,” said Gina Bolvin, president of the Bolvin Wealth Management Group, in a statement. “The market wants to see this number come down, but now the odds of a rate hike have increased.”
Tags: 10-year Treasury yield, employment, Federal Reserve, Jerome Powell, job openings, JOLTS, U.S. jobs report, vacancies