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US job openings unexpectedly rise a second month to 9.6 million

A 'Now Hiring' sign is displayed outside a resale clothing shop on June 2, 2023, in Los Angeles.    (Mario Tama/Getty Images North America/TNS)
By Reade Pickert Bloomberg News

U.S. job openings unexpectedly climbed in September for a second month, underscoring the persistent strength of labor demand in various pockets of the economy.

The number of available positions increased to 9.6 million from a downwardly revised 9.5 million in August, the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey showed Wednesday. Hiring edged up, while layoffs declined.

The level of openings exceeded the median estimate of 9.4 million in a Bloomberg survey of economists.

Stocks rose while Treasuries rallied as investors parsed through a variety of fresh economic data, as well as the U.S. Treasury’s announcement to slow the pace of increases in quarterly long-term debt sales.

The so-called quits rate, which measures voluntary job leavers as a share of total employment, held steady at 2.3% for a third month, the lowest since the start of 2021. A more moderate level of quits implies Americans are less confident in their ability to find another job in the current market.

While the September advance wasn’t particularly large, it added to a more than half a million surge in the prior month. The latest pickup – which was fueled by a jump in openings at accommodation and food services – points to the resilience of the labor market.

Such strength has underpinned consumer spending, kept a lid on unemployment and helped the economy weather high interest rates and rising prices.

Policymakers at the Federal Reserve are expected to leave interest rates unchanged at the end of their meeting this afternoon. While a pickup in the supply of workers has helped the jobs market become more balanced, elevated labor demand risks keeping upward pressure on inflation.

The ratio of openings to unemployed people held at 1.5, matching the lowest level in about two years. While still indicative of a tight labor market, the figure has eased substantially over the past year. At its peak in 2022, the ratio was 2 to 1.

The JOLTS report paints a more detailed picture of September hiring. Compared to the latest government employment report, which showed the fastest pace of payroll growth since the start of the year, Wednesday’s report showed hiring was largely flat.

While it picked up in accommodation and food services as well as retail trade, the pace of hiring ebbed in construction, finance and transportation and warehousing.

The data come just a few days before the latest monthly jobs report, which is currently forecast to show employers added 180,000 jobs in October. The unemployment rate is seen holding steady as monthly wage growth picks up slightly.

A report earlier Wednesday showed private payrolls posted the weakest back-to-back advances in more than two years, according to ADP Research Institute. Separate data showed the Institute for Supply Management’s measure of factory employment slipped back into contraction territory.

Some economists have questioned the reliability of the JOLTS statistics given the survey’s low response rate. That skepticism has been compounded by stories of employers “ghosting” jobseekers, a function of firms posting jobs they don’t actually intend to fill.

What Bloomberg Economics says…

“With demand for skilled workers cooling, and the September uptick in job openings and hiring likely representing temporary factors, labor-market loosening ahead could be more turbulent than what we’ve seen to date.”