BACK September 2022

The lot! Walk! Curry Restaurant has a sign in the window reading “We Are Hiring” in Cambridge, Massachusetts July 8, 2022.

Brian Snyder | Reuters

Job listings rose in September despite the Federal Reserve’s efforts to ease a historically tight job market that has helped push inflation to its highest level in four decades.

Job openings for the month totaled 10.72 million, well above the FactSet estimate of 9.85 million, according to Tuesday’s data from the Bureau of Labor Statistics’s Job Openings and Labor Turnover Survey.

The total exceeded the upwardly revised level for August by nearly half a million.

Fed policymakers are closely monitoring the JOLTS report for clues on the labor market. The latest numbers are unlikely to stop central bank officials from approving what is likely to be a fourth straight 0.75 percentage point rate hike this week.

September data shows that there are 1.9 job openings for every available worker. The mismatch between supply and demand has helped fuel wage growth that has seen the labor cost index, another closely watched data point from the Fed, grow at about 5% annually.

In other news on Tuesday, the ISM manufacturing index returned 50.2, showing the percentage of companies reporting expansion for October. That was slightly better than the Dow Jones estimate of 50.0, but down 0.9 percentage points from September.

Good news from the ISM data: the price index fell another 5.1 points to 46.6, suggesting easing inflationary pressures. Backlogs were also down, falling 5.6 points to 45.3, while supplier shipments fell 5.6 points to 46.8 and employment rose slightly to 50.

Hiring numbers have remained solid, although slowing.

The October jobs report, released on Friday, is expected to show growth of another 205k, which while strong by historical standards, would represent a further slowdown after average gains of 444k in the first half of 2022 but 372k over the past three months.

New hires fell by 252,000 in September while layoffs fell. The total number of separations has fallen sharply, falling by almost 400,000 to a 3.7% share of the labor force, compared with 4% in August.

Respondents to the ISM survey indicated that some pressures are continuing while others are easing.

“Challenges with labor and parts deliveries are easing. Orders are slowing after last month’s pent-up demand,” said a respondent from the transportation equipment industry.

Another from the food, drink and tobacco sector noted that “the growing threat of a recession is causing many customers to significantly delay their orders. In addition, global uncertainty about the Russia-Ukraine war is affecting global commodity markets.”

The Fed will release its rate decision Wednesday at 2:00 p.m. ET. Markets are pricing in a nearly 90% chance of a 0.75 percentage point gain while narrowly anticipating a further 0.5 percentage point move in December, according to CME Group data.