In September, US job openings rose suggesting that the demand for labour remained strong, which could temper financial market expectations that the United States Federal Reserve would dial back its aggressive interest rate rise in December. With roughly 1.9 job openings for every unemployed worker at the end of September, wage growth could remain elevated. But the Fed’s fight against inflation received a major boost from an Institute for Supply Management (ISM) survey on Tuesday showing raw materials prices fell for the first time in 28 months in October.
The latest jobs data, which came in advance of a broader employment report from the US Bureau of Labor Statistics on Friday, is disappointing for investors who are looking for signs that inflation is easing and that the Fed might consider tempering its interest rate increases. “That really fuels the expectation that the Fed has to do more hiking,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management. “The labour market is still too tight for the Fed.”
The US central bank is expected to deliver another 0.75 percent rate increase on Wednesday as it fights to cool demand for labour and the overall economy to bring inflation down to its 2 percent target. Wall Street is concerned that the central bank is being too aggressive in slowing the economy, running the risk that it could bring on a recession.