Online Job Postings Hold Steady As Fed Considers Energy Inflation In Rate Moves

Online job postings offer insight into the health of a nation's labor market. Nick Bunker, an economist at Indeed, shed some light on the current U.S. job scenario and provided a nuanced backdrop against which the Federal Reserve is set to reveal its interest rate decision.

"Online job postings aren't falling like they were earlier this year. In fact, they aren't falling at all," Bunker said on X (formerly Twitter) on Tuesday. Instead of falling, the Indeed Job Postings Index plateaued over the past three months, with the chart showing a sideways direction.

Bunker said job postings requiring in-person presence, like Food Prep and Childcare, surged by 3.3% since mid-June. In contrast, sectors embracing the work-from-home model, such as Software Development, have dwindled by 3.2% during the same period.

The August jobs report from the Bureau of Labor Statistics further underscored the Indeed economist’s observations. The report painted a mixed portrait, while job creation exceeded forecasts, the unemployment rate unexpectedly crept up, and wage growth tempered.

August saw non-farm payroll growth of 187,000, outpacing the estimated 170,000. The growth, although slightly below the six-month average, came ahead of initial expectations.

The unemployment rate climbed from 3.5% to 3.8%, as job openings fell to 8.8 million, suggesting a recalibration between labor market demand and supply. Wage dynamics echoed the broader slowdown, with year-over-year hourly earnings growing by 4.3%, missing the 4.4% projection.

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Looking ahead, according to CME’s FedWatch Tool, the market currently sees a 70% likelihood of a Fed rate pause in November.

The Fed factors in updated economic projections spanning GDP growth, inflation, and unemployment forecasts, in making its decision. The question is how the Fed perceives the inflation trajectory, especially given the recent oil price uptick.

The inflationary ramifications of the energy price rally remain a key point of focus. Chairman Jerome Powell's Jackson Hole speech hinted at a cautious assessment of evolving data and risks.

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