working hard or hardly working?
Why the strong job market may be a bad thing for the economy
The number of Americans applying for unemployment benefits has decreased since last week, now hovering at a historic low, Bloomberg reports. This comes at a time when job openings in the U.S. rose to 10.7 million in September, and there was also an increase in wages and sector job growth, all of which were expected to fall, CNN reports.
However, this strong job market may not be all good news. Federal Reserve Chair Jerome Powell called the jobs market "overheated" and took measures to cool it by raising interest rates another 0.75 percent. The demand for workers is far exceeding supply with 1.9 jobs available for every person who wants to work, CNN continues. As a result, employers pay higher wages to hold onto workers, which in turn drives up inflation. "Reducing inflation is likely to require a sustained period of below-trend growth and softening of labor market conditions," Powell said Wednesday.
While initial unemployment claims decreased by 1,000 last week, ongoing claims increased to 1.49 million, the highest since March. This is a sign that Americans are remaining unemployed for longer. Also while job openings increased, the number of people actually hired slipped to the lowest level in 15 months, indicating that employers are not eager to hire. A separate report also indicated that layoffs are rising with job-cut announcements increasing by over 48 percent in October.
The Bureau of Labor Statistics is releasing its jobs report on Friday where experts expect 200,000 added jobs last month as well as a slight increase in unemployment from 3.5 percent to 3.6 percent.