The number of US job openings rose unexpectedly

The number of vacancies in the United States suddenly increased in September. It was a surprise to economists who had expected job openings to fall amid aggressive Fed action aimed at cooling the economy.

According to the Bureau of Labor Statistics, the total number of job openings was 10.7 million, up from 10.3 million in August. Economists had predicted the number of job openings would fall to 10 million in September.

During the whole month, there were about 1.9 job openings for every person looking for work, down from 1.7 in August. This ratio has taken on significance as the Fed tries to reduce high inflation. When jobs are plentiful and workers are few, employees have leverage to demand higher wages, which puts upward pressure on inflation.

“If you were waiting for signs of labor inflation easing, you’ll have to keep waiting", said Lightcast senior economist Ron Hetrick.

But the report also showed signs of a cooling labor market, with hiring falling to just under 6.1 million — the lowest level since February 2021.

The number of jobs advertised on U.S. websites is steadily declining, and the gap between labor supply and demand is narrowing, according to ZipRecruiter Chief Economist Julia Pollak. She said to make no mistake: the labor market is cooling.

While the monthly numbers may show some volatility, especially for job openings, overall trends show a decline in job openings, hires and layoffs, Pollak added.

Still, the report doesn't provide enough reason to reassure the Fed that the labor market has cooled enough to ease inflation fears, said Raymond James Chief Economist Eugenio Aleman.

He stated while the current increase in job openings doesn't make up for the 890,000 decline last month, it shows that the labor market is still very tight, and that's bad news for the Fed and for inflation. So they still believe the Fed will raise rates by 75 basis points at Wednesday's meeting.