The decline comes after job openings had risen in September to just over 10.7 million, showing that the Federal Reserve’s efforts to cool the economy might be starting to hit the labor market. But the labor market still remains robust as there are almost twice as many job openings for every person looking for one. The data comes days before the Labor Department releases its much anticipated November jobs report. It will show if unemployment has ticked upward, though economists are expecting it to remain unchanged. We got our first glimpse of the shifting labor market outlook in today’s ADP unemployment report. Private employers added 127,000 jobs to the economy last month, the slowest rate since January of last year. While the ADP report isn’t always an accurate reflection of what’s to come in the government’s jobs report, it could be a sign that the labor market is starting to lose some of its strength. You might not care too much about the monthly ups and downs of the labor market, but the Fed does. The central bank often looks at the job market as a proxy of the economy’s strength. The more people that are employed, the stronger the economy is, making it more resilient to interest rate hikes. If Friday’s jobs report shows that unemployment has remained unchanged, the central bank might be more willing to hit us with another aggressive interest rate hike. An additional 75 basis points would make loans like mortgages and credit card debt much more expensive. The Fed is set to meet in two weeks and will make a decision on rates. Stock markets remained tentative this morning, and investors await remarks from Fed Reserve Chair Jerome Powell this afternoon, listening for any clues on what policy makers might do at their next meeting.
