Demand for US workers rebounded in September in a sign of a tight labor market despite the Federal Reserve’s attempts to cool the economy with a series of interest rate increases.

Employers added 437,000 job vacancies in September, bringing the total number of job vacancies to 10.7 million at the end of the month, according to the Labor Department’s Employment Opportunity and Turnover Survey, known as Jolts, released Tuesday.

“The massive increase in job opportunities was expected to slow, but the numbers show that the job market is accelerating, not slowing,” said Leila Oken, an economist at Analytics firm Lightcast.

The increase partially offset the decrease in job vacancies recorded in August. Since job listings are seen as a proxy for labor demand, investors interpreted the previous report as an early sign that the Fed’s plan to slow the labor market and cool inflation was working.

Officials had reported that the number of job vacancies in August fell by more than 1 million to 10.05 million, but on Tuesday they revised the total to 10.3 million.

Jason Furman, a former economic advisor to Barack Obama who now works at Harvard, wrote on Twitter: “Today’s release of Jolts is not good: 437,000 job openings, job market still very tight – a little narrower than we thought.”

Most importantly, Furman added, “This is a useful lesson in how not to read the overall data – after early hyperventilation last month.”

In September, healthcare employers posted a record number of job vacancies. The food service, transportation and warehousing sectors also helped increase the number of openings.

The data was released as the Federal Reserve meets in its latest policy meeting, and it underscores how tight the labor market is despite efforts by the central bank since March to remove the stimulus it put in place at the start of the coronavirus pandemic.

The data suggests that the Fed will need to continue to press ahead with plans to tighten monetary policy and keep interest rates at a restrictive level for an extended period in order to rebalance the demand for labor with the limited supply of workers.

On Wednesday, Federal Reserve officials are set to raise the benchmark interest rate by 0.75 percentage points for the fourth time in a row, raising the target range to between 3.75 percent and 4 percent.

At the last policy meeting in September, President Jay Powell said rates were at “lower than what might be a limiting one,” noting that the next step is expected to have a greater impact on growth.

Economists widely believe the Fed will need to raise interest rates to 5 per cent early next year if it is to return inflation to its 2 per cent target, a level many expect will lead to a recession and significant job losses.

Prominent Democrats including Elizabeth Warren and Bernie Sanders pressured the Fed to slow down before the economy reached that point.

In a letter this week, Warren, Sanders and nine other lawmakers said the Fed’s actions showed a “clear disregard for the livelihoods of millions of working Americans.”

“We are deeply concerned that raising your interest rates risks slowing the economy to a crawl while failing to slow the rate hike that continues to hurt families,” they wrote on Monday.

In September, the last time the forecast was published, most Fed officials saw the unemployment rate peaking at 4.4 percent. Economists warn that this is overly optimistic and many believe it will eventually exceed 5 per cent.

Despite the jump in job vacancies, the number of workers who left their jobs voluntarily continued to decline, which economists take as a sign that job seekers are losing confidence in the labor market. About 4.1 million quit in September, down 4.2 million the previous month, according to Labor Department data.

“It’s still generally bearish, but not the sustained cooling the Fed was looking for,” said Nick Bunker, an economist at Jobs Indeed.

The Labor Department is due to release its official payroll report on Friday.

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