The latest Job Openings and Labor Turnover Survey (JOLTS) report, released Tuesday, revealed a mixed picture for the United States economy.
The JOLTS report showed a surprising increase in job openings, rising to 8.1 million in November, the highest level since May. Economists had anticipated a slight decline to 7.7 million.
Job openings, a key indicator of labour demand, are closely monitored for insights into the economic outlook.
Hiring activity hit a decade low, underscoring a cooler labour market, yet the broader economic indicators suggest continued resilience.
Meanwhile, the December jobs report, due Friday, is expected to show 154,000 new jobs, with the unemployment rate steady at 4.2%.
Among other data releases, the service sector showed renewed strength in December, with the Institute for Supply Management's (ISM) Services PMI rising to 54.1 from November's 52.1. The reading surpassed economist expectations of 53.3, signalling robust demand in a sector comprising over two-thirds of the U.S. economy.
The ISM survey also highlighted inflationary pressures. The measure of prices paid for inputs surged to 64.4, the first time the index registered over 60 since January.
Business sentiment has improved following the election of President-elect Donald Trump, driven by optimism over tax reforms and deregulation. However, concerns remain about policies such as higher tariffs and potential mass deportations, which could elevate inflation and constrain growth.
The Federal Reserve, which cut interest rates three times in 2024 to a range of 4.25%-4.50%, anticipates only two rate reductions in 2025, acknowledging the resilience of the economy and the labour market.
While the Fed aims to bring inflation to its 2% target, progress has stalled in the second half of 2024 due to persistent economic strength.