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An increase in the total number of open, unfilled jobs in August contributed in part to the 10-year Treasury rate increasing above 4.75%, according to an analysis by the NAHB. Other factors contributing to higher rates include higher-for-longer monetary policy expectations, strong current GDP growth forecasts, long-term fiscal deficit conditions, and more debt issuance.

The number of open jobs for the economy jumped to 9.6 million in August, a significant increase from 8.9 million in July.

NAHB estimates indicate that this number must fall back below 8 million for the Federal Reserve to feel more comfortable about labor market conditions and their corresponding impact on inflation.

While the Fed intends for higher interest rates to have an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers. This is where the risk of a monetary policy mistake can be found. Good news for the labor market does not automatically imply bad news for inflation.

The construction labor market continued to cool in August. The count of open construction jobs decreased to 350,000. This estimate comes after a data series high of 488,000 in December 2022. The overall trend is one of cooling for open construction sector jobs as the housing market slows and backlog is reduced, with a notable uptick in month-to-month volatility since late last year.

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