Possible changes in the September jobs report

The number of vacancies will probably decrease in September as the US economy has experienced a massive increase in interest rates. Small growth of salaries in the non-agricultural sector is unlikely to keep the authorities from a tough fight against inflation.

On Friday at 8:30 a.m. (Eastern Standard Time) The Labor Department will release a monthly report about the situation in the job market. Here are the probable forecasts from Wall Street:

• number of vacancies in non-agricultural sector — +260,000 (+315,000 in August);
• level of unemployment — 3.7% (3.7% in August);
• average hourly wage per month — +0.3% (in August); 
• average hourly wage per year — 5.0% (+5.2% in August).

If the experts' assessments turn out to be correct, the monthly growth of salaries will be the lowest from December 2020. Any decrease in data in September will be a good sign for FRS which tries to change the situation in the job market. Currently, the market situation requires an increase in salaries and contributes to the growth of prices. 

However, FRS says that the policy of restrictions will be necessary over time until prices stabilize. In August, the Consumer Price Index grew by 8.3% year-over-year. It is well above the 2% inflation target.

On Thursday, the Head of the Federal Reserve Bank in Minneapolis Neel Kashkari declared that the FRS and Central Bank should continue to work on decreasing inflation, and they are still very far from stopping the growth of credit rates.

According to the Challenger report, US employees shortened 30,000 positions in September. It is 68% more than last year and 46% more than last month. The JOTL report showed that the number of jobs decreased by 1.1 million to 10.1 million.

However, this is still not enough for conclusions. Even if 260,000 vacancies appear in September, this will be much higher than the average number within the range of 150,000-200,000 that was relevant before the pandemic.

Moreover, the last time employment reports were surprisingly encouraging. In August, the increase in the number of vacancies was 315,000, which is higher than the forecast number of 300,000. According to the July report, 528,000 jobs were created in the US economy. It is double the current forecast of 250,000 jobs.

Bank of America experts Robert F. Ohmes and Molly Baum said that serious wage growth will continue. They noted that the indicators of activity, which were taken into account in the forecasts for the level of wages, were very high, and the movement in the labor market was hard to miss.