US job openings rose more than expected in April, according to data from the Labor Department on Wednesday which added pressure to the Federal Reserve's campaign to control inflation via rate hikes
WASHINGTON (Pakistan Point News / Sputnik - 31st May, 2023) US job openings rose more than expected in April, according to data from the Labor Department on Wednesday which added pressure to the Federal Reserve's campaign to control inflation via rate hikes.
"On the last business day of April, the number of job openings edged up to 10.1 million (+358,000)," the Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS) report.
Economists polled by US media had expected 9.4 million job openings for April versus 9.59 million in March.
The JOLTS data came ahead of the more important non-farm payrolls report for May, expected from the Labor Department on Friday. Economists are expecting some 180,000 payrolls to have been added in May. In April, there were 253,000 job additions versus a forecast of 180,000.
Joblessness among Americans reached an all-time high of 14.8% in April 2020, with the loss of some 20 million jobs after the COVID-19 breakout. Since then, the Labor Department's more important non-farm payrolls report has reported hundreds of thousands of job additions every month.
The blowout performance of the job market has, however, been a problem for the Fed, which cites employment and wage growth as one of the main contributors to inflation. US average hourly earnings have risen without stop since June 2021.
To fight inflation, the Fed has raised interest rates by 500 basis points, or 5%, over the past 16 months, bringing them to a peak of 525 basis points, or 5.25%.
Until three weeks ago, the Fed had been expected to pause its monetary tightening at its next decision on rates on June 14.
That changed after latest inflation data � the Personal Consumption Expenditures Index, which the Fed watches closely � came in higher than expected.
A broader gauge for US inflation, called the Consumer Price Index (CPI) hit 40-year highs in June 2022, expanding at an annual rate of 9.1%. Since then, it has slowed, growing at just 4.9% per annum in April, for its slowest expansion in two years. Even so, that was more than twice the Fed's appetite for inflation, which stands at just 2% per annum.
Given the persistence of inflation and the central bank's determination to shape policy according to data, Fed Governor Chris Waller said last week there could be a hold on rates in June and a hike in July. St. Louis Fed President James Bullard, one of the more aggressive advocates for tighter monetary policy, has suggested at least two more rate hikes this year, totaling 50 basis points, that would bring rates to a peak of 5.75%.
Some economists, however, warn that the central bank is going overboard with its inflation fight and the consequence will be a recession. Gross domestic product grew by just 1.3% for the first quarter of this year versus the 2.6% during the final quarter of 2022, the latest reading of the Commerce Department showed.
