Job openings at US companies unexpectedly rose in August to their highest level since May, putting pressure on the Federal Reserve to raise interest rates once more this year and maintain them higher for longer in the upcoming year.
The Job Openings and Labor Turnover Survey, or JOLTS, conducted by the Labor Department on Tuesday revealed that there were 9.61 million open positions on the final working day of August, up from an upwardly revised 8.92 million at the end of July.
The early July estimate of 8.83 million job opportunities was below what economists had anticipated, at 8.75 million. The revised July number of 8.92 million showed that there was a greater need for labor than initially believed.
The number for openings revealed on Tuesday was more than even the most upbeat predictions, showing that there is substantially more demand for workers than expected.
After declining for three months, there has finally been a monthly uptick in openings.
Job vacancies are seen as a crucial indicator of the demand for labor in the US. Wages may increase when more positions become available, especially when unemployment is low. On Friday, the government will announce the unemployment rate for August. According to economists, the rate will go from 3.8 percent in July to 3.7 percent.
Because it was concerned that an excessive demand for workers would lead to inflationary pressures in the economy, the Federal Reserve has been seeking to cool down the labor market by hiking interest rates. The Fed quickly increased its benchmark interest rate during the past year and a half, from near zero to a range of 5.25 to 5.5 percent, but the most recent data indicate that rates may not be as constrictive as Fed officials had believed.
When the Fed meets at the end of the month, pressure from the unexpected increase in openings will mount for another rate increase. Recently, Fed officials have made it clear that they are willing to raise interest rates again if the economic statistics show that the economy is not developing in a way that would cause inflation to return to the Fed's goal range of two percent.
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