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More signs of weakness have surfaced in the U.S. labor market as a government report showed jobless claims rising above market expectations while data from outplacement firm Challenger, Gray & Christmas showed job cuts surging by a whopping 46 percent in September.
A senior Federal Reserve official has acknowledged the pain American workers are feeling from soaring inflation as all the wage gains of the average employee over the past two years have not only been completely erased but have fallen deep into negative territory.
Federal Reserve governor Philip Jefferson said in his first public remarks since taking office in May that current "very tight" labor market dynamics are adding to inflationary pressures, while warning the Fed's fight against inflation is likely to take "some time" and the central bank is determined to tame runaway prices even at the cost of a hit to the economy.
Now government data shows that the number of job openings in the United States fell by over 1 million between July and August, a far sharper drop than forecasters expected and a sign of cracks in the labor market.
A key gauge the Federal Reserve relies on to check the pace of inflation against the central bank's 2 percent target fell more sharply than analysts expected, sending some risk assets rallying as investors bet that a more data-driven Fed now has more leeway for a faster pivot away from its current cycle of aggressive rate hikes.