Economic Update: Job Market Still Tight

 

 

Economic Update: Job Market Still Tight

 

Last Wednesday, the Fed raised its key interest rate from 5% to 5.25%, as expected, in part, because the job market remains incredibly strong. A tight labor market usually means upward inflation pressure. Why it matters: A cooling economy should cause job openings to drop, but that is happening slowly. Be smart: Businesses are still hiring at a strong clip and workers are still confident they can quit their jobs and find better ones easily. By the numbers: The number of job openings remains near record highs. Job openings were 9.6 million at the end of March. That is down 384,000 from February. But there are still 3.75 million more openings than there are unemployed workers to fill them. And: Quits remain at high levels. The quits rate was 2.5% in March. That is below the all-time high rate of 3%, but historically high. Click here to see how many people quit their jobs in March. Looking ahead: The Fed is likely to pause interest rate hikes for at least the next few months. It will be closely watching the jobs market in that period to see if it is cooling as it determines what to do with interest rates going forward.

 

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