WASHINGTON, (Globe Live Media) – U.S. job openings rose in July and data for the previous month was revised sharply higher, pointing to persistently strong labor demand that is providing cover for the Federal Reserve. to maintain its aggressive interest rate increases.
The Labor Department’s Job Openings and Turnover Survey, or JOLTS report, showed Tuesday that there were 2 jobs for every unemployed person last month, pointing to extremely tight conditions in the labor market. Millions continued to voluntarily quit their jobs, a sign of confidence in the job market.
“The Fed has accelerated their monetary tightening this year to an unprecedented degree and the economy is giving them no reason to hold back,” said Christopher Rupkey, chief economist at FWDBONDS in New York. “The labor market is strong as a bull, there are two jobs for the unemployed to choose from.”
Job openings, a measure of labor demand, rose by 199,000 to 11.239 million on the last day of July. Data for June was revised up to show 11.04 billion job openings instead of the previously reported 10.698 million. Economists polled had forecast 10.45 billion job openings.
Last month there were 81,000 more job openings in the transportation, warehousing and utility industries. Job openings increased by 53,000 in the arts, entertainment and recreation sector, while the federal government had 47,000 more openings and state and local government education had 42,000 more openings.
However, job openings fell by 47,000 in the durable goods manufacturing industry.
The Fed is trying to cool down labor demand and the broader economy to bring inflation down to its 2% target.
Fed Chairman Jerome Powell warned last week that Americans were heading into a painful period of slow economic growth and possibly rising unemployment as he aggressively hikes rates in a bid to balance supply and demand. The Fed has raised its policy rate by 225 basis points since March.
The job vacancy rate rose to 6.9% last month from 6.8% in June. Hiring fell to 6.382 million from 6.456 million in June, keeping the hiring rate unchanged at 4.2%.
Layoffs fell to 1.398 million from 1.4 million in June. Some 4.179 million people quit their jobs, up from 4.253 million in June. The rate of resignations, considered by monetary authorities and economists as a measure of labor market confidence, fell to 2.7% from 2.8% in June.
Confidence in the labor market was underscored by a separate Conference Board report that showed its so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to come by, fell to a level of 36.6 this month from 36.8 in July. This measure correlates with the Department of Labor’s unemployment rate.
“Markets will misread this report as an indication that the Fed will raise rates higher than expected,” said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. “The Fed is prone to mistakes and there’s a good chance inflation will come down for reasons other than rate hikes.”
HOLIDAY PLANS INCREASE
The Conference Board’s overall index of consumer confidence rebounded to 103.2 this month from 95.3 in July, ending three straight monthly declines. Economists had forecast the index to rise to 97.7. Consumers’ inflation expectations for the next 12 months fell to 7.0% from 7.4% in July.
Despite high inflation expectations, the proportion of consumers planning to go on vacation in the next six months rose to an eight-month high.
There was also a rise in the proportion of consumers planning to buy motor vehicles, home appliances such as refrigerators, washers, dryers and televisions over the next six months, which could keep consumer spending steady in the third quarter and the economy growing.
Despite higher mortgage rates as a result of the Fed’s aggressive stance, more consumers planned to buy a home over the next six months. That suggests that annual house price growth could remain strong, despite some moderation in the pace of monthly home value inflation.
A third report on Tuesday showed the S&P CoreLogic Case-Shiller national home price index rose 18.0% year-over-year in June after rising 19.9% in May.
The strong annual increase in house prices was corroborated by a fourth article from the Federal Housing Finance Agency that showed that house prices grew 16.2% in the 12 months to June, after rising 18 .3% in May.