US job openings remain elevated; manufacturing slump continues

WASHINGTON: US job openings fell less than expected in November as the labor market remains tight, which could see the Federal Reserve boosting interest rates to a higher level than currently anticipated to tame inflation.

There was, however, encouraging news in the inflation fight, with a survey from the Institute for Supply Management (ISM) on Wednesday showing its measure of prices paid by manufacturers for inputs diving in December to the lowest level since February 2016, discounting the plunge early in the COVID-19 pandemic.

The Fed is engaged in its fastest interest rate-hiking cycle since the 1980s as tries to dampen demand, including for labor, in order to quell inflation. Last month, the US central bank projected interest rates could rise to a peak of 5.1%. But persistent labor market tightness has led economists to expect that borrowing costs will increase to a much higher level and remain there for while, which could undercut economic growth.

“The labor markets are still too darn hot for policymakers,” said Christopher Rupkey, chief economist at FWDBONDS in New York. “Fed officials won’t be confident their monetary tightening is working until hiring demand begins to slow.” Job openings, a measure of labor demand, slipped 54,000 to 10.458 million on the last day of November, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report. Data for October was revised higher to show 10.512 million openings instead of the previously reported 10.334 million. Economists polled by Reuters had forecast 10 million job openings.

There were 1.7 jobs for every unemployed person in November.

Professional and business services reported an additional 212,000 job openings, while vacancies increased 39,000 in nondurable goods manufacturing. But job openings dropped 75,000 in finance and insurance and fell 44,000 in federal government.