Job openings hold strong despite rate hikes; manufacturing in contraction
Demand for employment remained high in November as companies looked for workers to fill positions despite worries of a looming recession, the Labor Department reported Wednesday.
The Job Openings and Labor Turnover Survey for the month showed available positions at 10.46 million, down just fractionally from October’s total and above the 10 million forecast by FactSet. The JOLTS survey is closely watched by Federal Reserve officials for signs of labor market slack.
As a share of the labor force, job openings remained at 6.4%, indicating demand for workers is still high despite the Fed’s efforts to cool the economy and bring down inflation, which has been driven partially by rising wages.
A separate data point Wednesday showed that the U.S. manufacturing sector contracted for the second consecutive month. The ISM Manufacturing Index for December came in at 48.4%, representing the percentage of companies showing expansion. That was about in line with the 48.5% estimate from Dow Jones. A reading below 50% indicates contraction.
On the jobs front, the JOLTS report showed a slight decrease in hiring and a bit of an increase in layoffs. However, the report had little indication of substantial labor market softening.
The quits level increased by 126,000, which took the rate up one-tenth of a percentage point to 2.7%, for a reading that is indicative of worker confidence that they can leave their jobs and find other employment.
Open positions outnumbered available workers by about 1.7 to 1.
The ISM report also showed that the labor market for the manufacturing sector is solid. The jobs index component of the reading rose 3 points to 51.4. At the same time, the prices index, a gauge of inflation, declined to 39.4, a drop of 3.6 points.
Markets will be watching later in the week for the Labor Department’s nonfarm payrolls report, which is expected to show a gain of 200,000 jobs.