The data complicates the interest rate outlook.
The jump in openings could put pressure on the Federal Reserve to raise interest rates even further.
The statistical relationship between high job vacancies, as calculated by the government, and low unemployment has often been cited by Federal Reserve Chairman Jerome H. Powell as a major sign that the labor market is “unsustainably hot” and “clearly out of fashion”. is”. equilibrium, where the demand for workers significantly exceeds the supply of available workers.”
But while some economists remain dissatisfied with progress in lowering prices, others worry that relying on job openings as a core measure of labor market balance could lead the Fed to overestimate the cost of borrowing for firms and households. too high, leading to a harder downturn than necessary.
“The quit rate is almost back to prepandemic levels, hiring has already returned to prepandemic pace,” Skanda Amarnath, the executive director of Employ America, a nonprofit that supports tight labor markets, wrote in a note. “JOLTS data shouldn’t drastically color this broader assessment of labor market tightness, but will be marginally relevant to the Fed’s own perception of the labor market heat.”
Some wonder how much weight to give to the report.
After peaking at around 12 million in March 2022, job vacancies as measured by government have generally declined. Over the past year, a mix of strong recruitment for already-listed positions and a decline in business sentiment has led to a pullback in newly created listings. But the upswing in April is at least a pause in recent trends.
Some economists believe that the JOLTS report should be taken with a grain of salt. Gregory Daco, the chief economist at EY-Parthenon, said the increase in quotes could reflect summer hires in the recovering services sector, though he added: “I would like to see June before assuming summer hires are stronger than last year.”
The report is based on a survey of approximately 21,000 non-farm businesses and government agencies. The Goldman Sachs economic research team has argued that as the response rate to the JOLTS report has plummeted since the start of the pandemic, “these findings argue for treating JOLTS less as the ‘real’ level of job postings right now.”
The May jobs report will be the next indicator.
The May employment report, released Friday by the Labor Department, will fill in the labor market picture before Fed policymakers meet on June 13-14.
Economists polled by Bloomberg expect the data to show an increase of 195,000 jobs on a seasonally adjusted basis, down from the 253,000 in the first report for April. Unemployment, which stood at 3.4 percent in April – the lowest level since 1969 – is expected to rise to 3.5 percent, and month-on-month wage growth is expected to moderate.