https://www.wsj.com/articles/job-openings-us-growth-labor-ma…
**U.S. Hiring Demand Remained Strong in April**
**Job openings slipped to 11.4 million from a record 11.9 million in March, while worker turnover remained elevated**
**By Bryan Mena, The Wall Street Journal, June 1, 2022**
**U.S. job openings remained close to record levels in April, and workers continued to quit at an elevated rate, signs of an exceptionally tight labor market that has contributed to historically high inflation....**
**Demand for workers has exceeded the number of unemployed people looking for work for the past year. During the same stretch, employers have added more than 400,000 jobs a month to U.S. payrolls and the unemployment rate has dropped 3.6%, slightly above its prepandemic level of 3.5% and close to a 50-year low. The hot jobs market is driving up wages at a historically high rate and contributing to the highest inflation in four decades....** [end quote]
The Federal Reserve took a key step in tightening monetary policy on Wednesday by launching a plan to begin shrinking its $9 trillion asset portfolio by allowing securities to mature without reinvesting their proceeds into new ones. The move could put upward pressure on interest rates, adding muscle to its inflation-fighting effort. The Fed’s planned moves were announced in December 2021. Inflation today is much higher than it was then. The Fed is putting its money where its mouth is.
https://www.cnbc.com/2021/12/15/fed-will-aggressively-dial-b…
Letting the bonds “roll off” is not as aggressive as selling them in the bond market. But the Fed had been buying $120 billion per month, $80 billion in U.S. Treasury securities and $40 billion in mortgage-backed securities, since 2020.
The exceptionally tight labor market is guaranteed to lead to more inflation. The Fed will get serious about cooling off the economy to cool inflation by raising interest rates. That will lead to higher unemployment and possibly a recession.
Don’t be surprised. It’s the core objective of the plan.
Wendy