Tag Archives: job market

Federal Reserve chair Jerome Powell said “The time has come for policy to adjust”

Federal-Reserve-chair-Jerome-Powell

Important Takeaways:

  • Federal Reserve chair Jerome Powell said Friday that the central bank is poised to cut interest rates, adding that policymakers do not want to see the job market cool any further.
  • In a much-anticipated speech in Jackson Hole, Wyoming, Powell said the Fed’s fight to reduce inflation has largely succeeded and it now is attuned to risks of a faltering job market — setting up a rate cut in mid-September.
  • The unemployment has now risen to 4.3%, up nearly a percentage point from recent lows, raising alarm bells about a weakening economy.
  • “We do not seek or welcome further cooling in labor market conditions,” he said, in a notable contrast with his tone over much of the last two years, when he described a cooling in the job market as needed in order to bring the economy into better balance.
  • Between the lines: “We will do everything we can to support a strong labor market as we make further progress toward price stability,” Powell said, suggesting the recent worsening of the job market — the unemployment rate has risen from 3.7% in January to 4.3% in July — has the Fed’s attention.

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Fed’s Powell keeps to script on jobs recovery, feels heat on inflation front

By Howard Schneider

WASHINGTON (Reuters) – Federal Reserve Chair Jerome Powell on Wednesday pledged “powerful support” to complete the U.S. economic recovery from the coronavirus pandemic, but faced sharp questions from Republican lawmakers concerned about recent spikes in inflation.

In testimony to the U.S. House of Representatives Financial Services Committee, Powell said he is confident recent price hikes are associated with the country’s post-pandemic reopening and will fade, and that the Fed should stay focused on getting as many people back to work as possible.

Any move to reduce support for the economy, by first slowing the U.S. central bank’s $120 billion in monthly bond purchases, is “still a ways off,” Powell said, with millions of people who were working before the crisis still to be pulled back into the labor force.

“The high inflation readings are for a small group of goods and services directly tied to the reopening,” Powell testified, language that indicated he saw no need to rush the shift towards post-pandemic policy.

Representative Ann Wagner, a Republican from Missouri, challenged that conclusion, relaying what’s likely to be a refrain from lawmakers as long as inflation continues to rise: their constituents are getting worried.

At a prior hearing in February “you reiterated that price spikes were temporary. I can tell you that the families and businesses I represent are not feeling that these price spikes are temporary,” Wagner said.

“The incoming data have been higher than expected and hoped for but are still consistent” with a temporary bout of higher prices, Powell responded.

“It is housing, appliances, food prices, gas,” Wagner retorted, a sign of what could become growing political pressure on the Fed to get tougher on inflation if the spikes in prices continue.

Representative Anthony Gonzalez, a Republican from Ohio, took aim at a new Fed framework that aims to encourage higher employment by letting inflation run “moderately” above the central bank’s 2% target “for some time”

“How long is ‘some time’?” Gonzalez asked, arguing that the Fed’s current policies may be doing little to encourage employment at a time when employers are already posting record numbers of jobs.

“It depends,” Powell said, demonstrating the dilemma he faces if prices continue rising. “Right now inflation is well above 2%. … The question for the (Federal Open Market) Committee will be where does this leave us in six months.”

U.S. Treasury yields fell after the release of Powell’s prepared testimony earlier on Wednesday and remained lower even though prices of factory inputs rose at a higher-than-expected pace in June, an indication markets construed his comments as a sign the monetary taps will stay open.

Powell’s remarks were notable as well for excluding any mention of risks to the recovery from the coronavirus Delta variant, with the Fed chief saying the central bank expects strong upcoming job gains “as public health conditions continue to improve.”

The Fed’s June meeting saw officials begin a move towards post-pandemic policy, with some of them poised to tighten financial conditions sooner to ensure inflation remains contained. Renewed coronavirus-related risks, if they materialize, could push the Fed in the other direction of keeping support for the recovery in place longer in case household and business spending wane amid a rise in new infections.

Falling Treasury bond yields have indicated concern among investors about slowing U.S. economic growth, even as new data on prices this week showed consumers paying appreciably more for an array of goods and services, including appliances, fabric, beef and rent.

In a report to Congress last week, the Fed said that as the “extraordinary circumstances” of the reopening subside, “supply and demand should become better aligned, and inflation is widely expected to move down.”

RISING DELTA

While each month of high inflation makes it harder to stick to that conviction, Powell for now is keeping to the Fed’s core narrative of a job market that still needs massive help from the central bank to restore it to its pre-pandemic health and minimize the long-term damage from a historic, virus-driven calamity.

The Fed has said it will not reduce its bond-buying program absent “substantial further progress” in regaining the roughly 7.5 million jobs still missing since the onset of the pandemic in March 2020, a threshold policymakers feel will likely be met later this year.

That hinges, however, on continued reopening of the economy, recovery in the travel, leisure and other “social” industries devastated by the health crisis, and the willingness of currently unemployed or homebound individuals to fill the record number of jobs on offer.

When Powell last spoke about the economy at a news briefing after the end of the June 15-16 policy meeting, new daily coronavirus infections were falling toward recent lows, and the Fed dropped language from its policy statement that the pandemic “continues to weigh on the economy.”

Since then the Delta variant has pushed the seven-day moving average of cases from 11,000 to above 21,000, and health officials are concerned about the spread of the variant in parts of the country where vaccination rates are low. The numbers are more ominous globally.

Powell is scheduled to appear before the U.S. Senate Banking Committee at 9:30 a.m. (1330 GMT) on Thursday.

(Reporting by Howard Schneider; Editing by Dan Burns, Andrea Ricci and Paul Simao)

U.S. weekly unemployment claims lowest since 1969

FILE PHOTO: A "Help Wanted" sign sits in the window of a shop in Harvard Square in Cambridge, Massachusetts, U.S., February 11, 2019. REUTERS/Brian Snyder/File Photo

WASHINGTON, (Reuters) – The number of Americans filing applications for unemployment benefits dropped to a 49-1/2-year low last week, pointing to sustained labor market strength that could temper expectations of a sharp slowdown in economic growth.

Initial claims for state unemployment benefits fell 8,000 to a seasonally adjusted 196,000 for the week ended April 6, the lowest level since early October 1969. Claims have now declined for four straight weeks. Data for the prior week was revised to show 2,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims would rise to 211,000 in the latest week. The Labor Department said no states were estimated last week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 7,000 to 207,000 last week, the lowest level since early December 1969.

The labor market is the main pillar of support for the economy, which appears to have lost momentum in the first quarter as the stimulus from a $1.5 trillion tax cut package fades and a trade war between China and the United States and softening global demand hurt exports.

Nonfarm payrolls increased by 196,000 jobs in March, well above the roughly 100,000 needed per month to keep up with growth in the working-age population. The unemployment rate is at 3.8 percent, close to the 3.7 percent Federal Reserve officials project it will be by the end of the year.

Thursday’s claims report showed the number of people receiving benefits after an initial week of aid decreased 13,000 to 1.71 million for the week ended March 30. The four-week moving average of the so-called continuing claims dropped 11,000 to 1.73 million.

(Reporting by Lucia Mutikani Editing by Paul Simao) ((Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters Messaging: lucia.mutikani.thomsonreuters.com@reuters.net)

Finding the bright side in a graying U.S. workforce

By Mark Miller

CHICAGO (Reuters) – (The opinions expressed here are those of the author, a columnist for Reuters.)

U.S. Economists call it the “old-age dependency ratio” – a rough measure of the balance between people who work and retirees.

The ratio compares the number of people over age 65 – classified as old – with those aged 15 to 64 – and it is not headed in a healthy direction: by 2040, there will be 2.7 working-age Americans for each retiree, down from 4.8 in 2010.

That number from the Federal Reserve Bank of Atlanta points toward a shortfall of workers available to support an aging population, and it is cited often to justify doom-and-gloom warnings about economic growth, federal spending and the health of our social insurance programs.

But do not tell that to Chris Farrell. The senior economics contributor to “Marketplace,” American Public Media’s nationally syndicated public radio business and economic program is bullish on aging. Farrell is the author of a new book, “Purpose and a Paycheck: Finding Meaning, Money, and Happiness in the Second Half of Life,” that seeks to upend a range of myths about old age and dependency, replacing them with a new vision of contribution to society and purpose-driven living.

He argues the case with convincing economic analysis and on-the-ground reporting – interviewing dozens of older workers finding their way forward in the labor market, and profiling companies on the leading edge of change.

For starters, he notes that the dependency ratio itself is deeply flawed because it assumes everyone over age 64 has left the workforce – and increasingly, that is not the case. Participation in the labor force by older workers has been rising steadily in recent years. Farrell cites U.S. Bureau of Labor Statistics figures showing that from 1995 to 2016, the share of men ages 65 to 69 in the labor force rose from 28 percent to 38 percent; for women, the figure jumped from 18 percent to 30 percent.

“I’m convinced there is a large segment of people out there who think we all just go from age 60 to 90 in one year, Farrell told me in an interview. And when you look at all the research coming out of Wall Street and many economists, their perspective is not that much different.”

RESHAPING THE ECONOMY

Farrell sees the aging of the U.S. population not as a problem, but a major opportunity to create a more inclusive society and vibrant economy. He argues that a more engaged older population will shape everyday life – everything from housing markets to public transportation, urban design and healthcare.

“We have this image of the way life unfolds – you go to school, work and raise children and then retire somewhere else,” he said. “Plenty of our institutions have reflected that. But as people work longer and stay in urban areas longer, the impact will be profound – just for one example, older people tend to want public transportation – and so do younger people.”

Farrell’s analysis of the labor market for older workers is especially provocative. The Great Recession ushered in a decade of high U.S. unemployment rates for millions who found themselves shut out of the job market by age discrimination. And age discrimination is alive and well.

For example, a recent analysis of data from the University of Michigan Health and Retirement Study by ProPublica and the Urban Institute found that 56 percent of older workers are laid off at least once or leave jobs under such financially damaging circumstances that it’s likely they were pushed out rather than choosing to go voluntarily. The report also found that just one in 10 of these workers earn as much as they did before their job losses.

Farrell acknowledges that discrimination remains a tough problem, but he argues we are at an inflection point where employers will be forced to accommodate older workers due to the overall tight labor market. “It’s not that employers have suddenly become enlightened, but they will have to look at older workers with a different eye and think about hiring differently,” he said. “Do they want to fulfill their missions and grow their businesses, or not?”

Farrell tells the stories of dozens of experienced workers and later-life entrepreneurs who are forging new paths in their sixties, seventies and beyond. He also digs up plenty of examples of companies that are rethinking their approaches to accommodating older workers.

A small Minnesota precision machine company facing a thin pipeline of skilled machinists has invested in new equipment to reduce the physical strain on older workers so they can stick around longer. A healthcare company in Virginia changed the way it calculates pension benefits to avoid penalizing workers who cut back to part-time hours close to retirement.

“I really believe we’ve crossed the Rubicon on this problem,” he said. “Older workers just will be looked at differently – we’ve crossed a line and can’t go back.”

(Reporting and writing by Mark Miller in Chicago; Editing by Matthew Lewis)

Fed’s Powell: U.S. economy performing ‘very well’ though benefits uneven

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell speaks at his news conference after the two-day meeting of the Federal Open Market Committee (FOMC) on interest rate policy in Washington, U.S., June 13, 2018. REUTERS/Yuri Gripas/File Photo/File Photo/File Photo

(Reuters) – The U.S. economy is “performing very well overall,” Federal Reserve Chairman Jerome Powell said in remarks prepared for the opening of a rural housing conference in Washington.

The job market in particular “by many national-level measures…is very strong,” with unemployment at a 50-year low, Powell said, capping a week of widespread market nervousness with a reminder that the U.S. economy continues to expand.

Powell’s brief prepared statement did not address monetary policy or the Fed’s upcoming meeting, at which the central bank will decide whether to raise interest rates and will also release new economic projections for the coming year.

Powell noted to the Housing Assistance Council, a nonprofit that focuses on rural housing issues, that the benefits of the ongoing recovery have not spread evenly around the country but have been concentrated in major cities.

“Some communities have yet to feel the full benefits of the ongoing expansion,” Powell said, with double-digit unemployment still the norm in more than two dozen counties and nearly a third of rural homes without broadband internet.

(Reporting by Howard Schneider in Indianapolis; editing by Diane Craft)

U.S. labor market hot, jobs hard to fill: Fed’s Harker

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson - RC1458E83C90

(Reuters) – U.S. employers are struggling to fill jobs and that is unlikely to change any time soon given the labor market is getting quite tight, Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday.

“We have a labor market with very little slack left, and the most common refrain I hear from employers is that they can’t fill the jobs they have,” Harker said in prepared remarks to a conference on higher education. “Those demographic and technological pressures are unlikely to recede.”

The unemployment rate fell to near a 49-year low of 3.7 percent last month.

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)

U.S. weekly jobless claims hit more than 48-and-a-half-year low

FILE PHOTO: Job seekers and recruiters gather at TechFair in Los Angeles, California, U.S. March 8, 2018. REUTERS/Monica Almeida

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits dropped to a more than 48-1/2-year low last week as the labor market strengthens further, but trade tensions are casting a shadow over the economy’s outlook.

Other data on Thursday showed manufacturing activity in the mid-Atlantic region accelerated in July amid a surge in orders received by factories. But the Philadelphia Federal Reserve survey also showed manufacturers paying more for inputs and less upbeat about business conditions over the next six months.

Fewer manufacturers planned to increase capital spending, suggesting trade tensions, marked by tit-for-tat import tariffs between the United States and its trade partners, including China, Canada, Mexico and the European Union, could be starting to hurt business sentiment.

The survey came on the heels of the Federal Reserve’s Beige Book report on Wednesday, showing manufacturers in all districts worried about the tariffs and reporting higher prices and supply disruptions, which they blamed on the new trade policies.

“Yesterday’s Beige Book and the recent decline in the investment intentions balance in the Philly Fed survey show that escalating trade tensions are starting to have a material impact on companies’ confidence about the future,” said Brian Coulton, chief economist at ratings agency Fitch.

Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 207,000 for the week ended July 14, the lowest reading since early December 1969, the Labor Department said. Economists polled by Reuters had forecast claims rising to 220,000 in the latest week.

The second straight weekly decline in claims, however, likely reflects difficulties adjusting the data for seasonal fluctuations around this time of the year when motor vehicle manufacturers shut assembly lines for annual retooling.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 2,750 to 220,500 last week.

The dollar firmed against a basket of currencies. Stocks on Wall Street were lower, while prices for U.S. Treasuries rose.

WORKER SHORTAGE

The claims data covered the survey week for the nonfarm payrolls component of July’s employment report. The four-week average of claims dipped 500 between the June and July survey periods, suggesting solid job growth this month.

The economy created 213,000 jobs in June, with the unemployment rate rising two-tenths of a percentage point to 4.0 percent as more Americans entered the labor force, in a sign of confidence in their job prospects.

Federal Reserve Chairman Jerome Powell told lawmakers this week that with appropriate monetary policy, the job market will remain strong “over the next several years.”

The labor market is viewed as being near or at full employment. There were 6.6 million unfilled jobs in May, an indication that companies cannot find qualified workers.

That was reinforced by the Beige Book, which showed worker shortages persisting in early July across a wide range of occupations, including highly skilled engineers, specialized construction and manufacturing workers, information technology professionals and truck drivers.

Thursday’s survey from the Philadelphia Fed showed its business conditions index jumped to a reading of 25.7 in July from 19.9 in June. The survey’s measure of new orders increased to 31.4 from a reading of 17.9 in June.

But its gauge of factory employment fell as did the average workweek. Manufacturers also continued to report higher prices for both purchased inputs and their own manufactured goods. The survey’s prices paid index soared to 62.9 this month, the highest level since June 2008, from 51.8 in June.

The index has risen 30 points since January. Sixty-three percent of manufacturers in the region reported paying more for inputs this month compared with 54 percent in June.

The price increases are likely related to tariffs on steel and aluminum imports, which were imposed by the Trump administration to protect domestic industries from what it says is unfair foreign competition.

Wednesday’s Beige Book mentioned a machinery manufacturer in the Philadelphia area who described the effects of the steel tariffs as “chaotic to its supply chain, disrupting planned orders, increasing prices, and prompting some panic buying.”

The Philadelphia survey’s index for future activity decreased for the fourth straight month. Capital spending plans over the next six months also fell as did intentions to hire more factory workers.

“Further escalation could create worse conditions and this remains a downside risk to the otherwise positive outlook over the next year,” said Adam Ozimek, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Americans job market tightening, inflation steadily rising

FILE PHOTO: A help wanted sign is posted on the door of a gas station in Encinitas California

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits fell last week, pointing to sustained labor strength even as economic growth appears to have slowed early in the first quarter.

Other data on Thursday showed a rise in the prices of imported goods in February amid U.S. dollar weakness, bolstering expectations that inflation will pick up this year. Labor market strength and a steady increase in price pressures could allow the Federal Reserve to raise interest rates next week.

Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 226,000 for the week ended March 10, the Labor Department said on Thursday. Claims decreased to 210,000 during the week ended Feb. 24, which was the lowest level since December 1969.

Last week’s drop in claims was in line with economists’ expectations. It was the 158th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was much smaller.

Fed officials consider the labor market to be near or a little beyond full employment. The unemployment rate is at a 17-year low of 4.1 percent.

The economy created 313,000 jobs in February. Economists are optimistic that tightening labor market conditions will boost wage growth in the second half of this year.

That should help to underpin consumer spending, which slowed at the start of the year. Data on Wednesday showed retail sales fell in February for a third straight month.

Gross domestic product growth estimates for the first quarter are as low as a 1.7 percent annualized rate. Reports on home sales and industrial production in January have also been weak. The economy grew at a 2.5 percent pace in the fourth quarter.

The U.S. dollar gained against a basket of currencies after Thursday’s data while U.S. stock index futures moved higher. Prices of U.S. Treasuries were trading mostly lower. Diminishing labor market slack is also expected to help boost inflation toward the U.S. central bank’s 2 percent target.

IMPORTED CAPITAL GOODS PRICES RISE

In another report, the Labor Department said import prices increased 0.4 percent last month after accelerating 0.8 percent in January. That lifted the year-on-year increase in import prices to 3.5 percent from January.

Last month, prices for imported capital goods jumped 0.6 percent. That was the biggest increase since April 2008 and followed an unchanged reading in January.

Prices of imported consumer goods excluding automobiles rose 0.5 percent, the largest gain since January 2014, after edging up 0.1 percent in the prior month. These price increases likely reflected the dollar’s depreciation against the currencies of the United States’ main trading partners, and will eventually filter through to core producer and consumer inflation.

Imported petroleum prices fell 0.5 percent in February, the first drop in seven months, after rising 3.0 percent in January. Import prices excluding petroleum surged 0.5 percent after a similar gain in January.

The price of goods imported from China rose 0.2 percent. Prices for imports from China increased 0.3 percent in the 12 months through February, the biggest advance since June 2014.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Americans voluntarily quitting jobs as labor market tightens

: A help wanted sign is posted on the door of a gas station in Encinitas, California, U.S., September 6, 2013.

By Lucia Mutikani

WASHINGTON (Reuters) – The number of American workers voluntarily quitting their jobs jumped in December to the highest level in nearly 17 years, in a strong show of confidence in the labor market which further bolsters expectations of faster wage growth this year.

The Labor Department’s monthly Job Openings and Labor Turnover Survey (JOLTS) report published on Tuesday came on the heels of news last week that annual wage growth in January was the strongest in more than 8-1/2 years. The labor market is almost at full employment.

The number of workers willingly leaving their jobs increased by 98,000 to 3.259 million, the highest level since January 2001. That lifted the quits rate to a 2.2 percent from 2.1 percent in November. This rate, which the Federal Reserve looks at as a measure of job market confidence, has rebounded from a low of 1.3 percent in late 2009.

“I had thought that by now, the fear of moving to another company would have faded,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “It really hadn’t very much, though maybe it is finally happening.”Rising job turnover boosts economists’ optimism that wage growth will accelerate this year and in turn help to push inflation toward the Fed’s 2 percent target. While economists remain confident that the U.S. central bank will increase interest rates at least three times this year, much would depend on the fortunes of the U.S. stock market.

Stocks on Wall on Monday recorded their biggest drop since August 2011 as concerns over rising U.S. interest rates and government bond yields hit record-high valuations of stocks.

“The data today are likely to keep the Fed on the path of gradual rate hikes this year as long as the stock market stabilizes from its death plunge the last two weeks,” said Chris Rupkey, chief economist at MUFG in New York.

“Labor market conditions are picture perfect today, but that can change in a hurry if worsening financial conditions and plunging markets take a toll on business confidence.”

The JOLTS report also showed that job openings, a measure of labor demand, decreased 167,000 to a seasonally adjusted 5.8 million. Still, job openings are not too far from a record high of 6.2 million touched in September.

The decline in job openings in December was led by the professional and business services sector, which saw a decrease of 119,000. Job openings in the retail trade sector fell 85,000 while vacancies in construction dropped 52,000.

But job openings in the information sector increased 33,000 and the federal government had an additional 13,000 vacancies in December. The jobs openings rate slipped one-tenth of a percentage point to 3.8 percent in December.

Hiring was little changed at 5.49 million.

“The recent moderation across much of the JOLTS data is not alarming to us given that levels still remain favorable across much of the data and that we have been expecting the pace of job growth to cool relative to the recent strong gains,” said Daniel Silver, an economist at JPMorgan in New York.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. job openings at record high; qualified workers scarce

FILE PHOTO: Men walk in the hall outside a Hire Our Heroes job fair targeting unemployed military veterans and sponsored by the Cable Show, a cable television industry trade show in Washington, June 11, 2013. REUTERS/Jonathan Ernst/File Photo

WASHINGTON (Reuters) – U.S. job openings rose to a record high in July, suggesting a slowdown in job growth in August was an aberration and that the labor market was strong before the recent disruptive hurricanes.

The monthly Job Openings and Labor Turnover Survey, or JOLTS, released by the Labor Department on Tuesday showed the labor market continued to tighten amid a scarcity of workers.

The strong labor market fundamentals could encourage the Federal Reserve to continue tightening monetary policy this year despite inflation persistently running below the U.S. central bank’s 2 percent target.

“Employers need skilled labor and experienced workers are in short supply, which continues to suggest the economy has returned to a relatively normal labor market that does not need exceptional support from the Fed,” said John Ryding, chief economist at RDQ Economics in New York.

Job openings, a measure of labor demand, increased by 54,000 to a seasonally adjusted 6.2 million. That was the highest level since the data series started in December 2000. Job openings have now been above 6 million for two straight months.

Hiring increased 69,000 to 5.5 million in July, lifting the hiring rate to a near 1-1/2-year high of 3.8 percent from 3.7 percent in June.

Labor market tightness was also underscored by another report from the National Federation of Independent Business.

The NFIB survey showed a record share of small businesses in August ranked difficulties finding qualified workers as “their top business problem.” The rise in job vacancies in July bolsters views that August’ s moderation in job gains was largely because of a seasonal quirk.

SOLID SHAPE

Nonfarm payrolls increased by 156,000 jobs last month, with the private services sector hiring the smallest number of workers in five months. Job growth in September could, however, be held back by hurricanes Harvey and Irma, which struck Texas and Florida, respectively.

The two states account for about 14 percent of U.S. employment. Temporary unemployment as a result of flooding from Harvey has already caused a surge in first-time applications for jobless benefits.

“The JOLTS data signal that the labor market was in solid shape in July and support our view that we should not be very concerned about the modest disappointment in the August payroll report,” said Daniel Silver, an economist at JPMorgan in New York.

JOLTS is one of the job market metrics on Fed Chair Janet Yellen’s dashboard. Economists expect the U.S. central bank will announce a plan to start reducing its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities at its Sept. 19-20 policy meeting.

Benign inflation amid sluggish wage growth, however, suggests the Fed will delay raising interest rates again until December. It has increased borrowing costs twice this year.

Job openings in transportation, warehousing and utilities increased 70,000 in July and educational services had an additional 26,000 vacancies. There were 20,000 more job openings in construction.

Manufacturing, however, saw a 29,000 drop in vacancies in July. Health care and social assistance job openings decreased 72,000 and federal government vacancies declined 21,000.

About 3.2 million Americans voluntarily quit their jobs in July, up from 3.1 million in June. The quits rate, which the Fed looks at as a measure of job market confidence, rose to 2.2 percent from 2.1 percent in June.

“One of the problems facing firms is that workers are still pretty much locked into their current positions,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “With companies unwilling to bid for workers from other firms, there is little reason to leave and that is limiting the availability of qualified workers.”

Layoffs fell 23,000 to 1.78 million in July.

(Reporting by Lucia Mutikani; Editing by Phil Berlowitz)