US Job Openings Surpass 10 Million for First Time... Treasury Yields Reach 1.3% Reflecting Tapering

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] News is continuously emerging that the U.S. employment recovery is gaining momentum. As the possibility of the Federal Reserve's (Fed) asset purchase tapering increases due to the employment recovery, U.S. Treasury yields are also rising rapidly.

On the 9th (local time), the U.S. Department of Labor announced through the June Job Openings and Labor Turnover Survey (JOLTS) that the number of job openings in June was recorded at 10.1 million. The June job openings far exceeded May's 9.2 million as well as the Dow Jones consensus forecast of 9.1 million.

This result is the first since the statistics began in 2000. It is also the first time the number of job openings has exceeded 10 million.

The Wall Street Journal (WSJ) reported that this survey result confirms that the U.S. labor market remains abnormally tight due to increased labor demand. This means that companies are experiencing difficulties in hiring personnel.

Nick Bunker, Research Director at the Indeed Hiring Lab, explained, "Labor demand continues to strengthen."

The Department of Labor recorded 930,000 new hires in June and 940,000 in July. The unemployment rate also fell to 5.4% as of July.

The Department of Labor analyzed that 8.7 million people were looking for jobs in July. Although there is a one-month lag, the number of job openings still greatly exceeds the number of job seekers.

As employment recovery indicators were released one after another, the U.S. 10-year Treasury yield rose to 1.324% on the day. Although U.S. Treasury yields had fallen to 1.127% last week, expectations for employment recovery have been reflected, turning the trend upward. A rise in Treasury yields means a decline in bond prices.

Fed Chair Jerome Powell has previously indicated that employment data improvement must be confirmed before deciding on tapering.

If the Consumer Price Index (CPI) to be released this week continues its strong upward trend, the conditions for the Fed to begin tapering will become even more ripe.

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