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On The Money — Job openings dive amid recession fears

New numbers show that interest rate hikes are beginning to cool the labor market. We’ll also look at global recession warnings, Janet Yellen’s recent comments on her future and Elon Musk’s revived Twitter deal. 

But first, we’ll tell you what happens if Lake Powell runs out of water

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

Job openings plunged, hiring kept strong in August 

U.S. job openings dropped sharply in August, according to Labor Department data released Tuesday, falling at the fastest one-month pace since March 2020. 

Businesses still hired employees at a steady pace and kept layoffs near historic lows in August, according to the Job Openings and Labor Turnover report. But firms also cut back their postings for open jobs, a possible sign of businesses bracing for an economic slowdown. 

  • The number of open jobs listed in the U.S. fell from 11.2 million in July to
    10.1 million in August, a decline of 1.1 million job openings. 
  • Job openings are now well below a record of 11.4 million set in December 2021. 
  • The number of workers laid off from their jobs in August ticked higher from July, rising to 1.6 million from 1.5 million in the previous month, but remained low overall. 

The background: The numbers indicate that rate hikes are beginning to dent the labor market. 

  • The steep decline in job openings could sap opportunities for workers — and their leverage to get higher wages — as the Federal Reserve slams the brakes on a historically strong labor market. 
  • Fewer open jobs means businesses may have an easier time filling other positions as jobseekers have increasingly limited options. That could allow firms to hire workers at lower wages, which would help reduce inflation. 

Sylvan has more here. 

POWELL’S RECESSION

UN warns of a global recession as countries race to lower inflation  

The United Nations warned of a global recession Monday amid efforts by regulators in the world’s most advanced economies — like the U.S. and Europe — to stanch sky-high inflation.   

The international body called on central banks like the U.S. Federal Reserve “to revert course and avoid the temptation to try to bring down prices by relying on ever higher interest rates.”  

  • The U.N. is urging central banks to stave off rate hikes, describing any upcoming recessions as “policy-induced” and a matter of “political will.” 
  • The body argued that wage-price spirals, whereby higher wages lead to higher prices and vice versa, are not a relevant force in today’s economy.  

Tobias Burns has more here

DONE DEAL? 

Elon Musk agrees to $44B acquisition of Twitter in hopes of averting trial 

Elon Musk agreed to pay $44 billion to buy Twitter if a lawsuit brought by the company in an attempt to force him to follow through with the deal is closed, according to a filing with the Securities and Exchange Commission (SEC) uploaded Tuesday.  

Attorneys representing Musk sent a letter to Twitter Monday stating that they intend to proceed with the closing of the deal the parties agreed to in April, provided that the court enters an immediate stay in the case.  

  • The offer comes roughly two weeks before the Tesla CEO was set to face Twitter in a trial over the deal.  
  • Musk was trying to back out of the deal over allegations that Twitter was breaching its side by not providing him with information about the number of spam bot accounts on the platform. 

The Hill’s Rebecca Klar has more here

RUMOR DENIED

Yellen dismisses reports she’s leaving administration 

Treasury Secretary Janet Yellen dismissed recent reports in the media on Tuesday that she would be leaving the Biden administration. 

Yellen shut down the rumor at the 2022 Freedman’s Bank Forum in Washington, D.C., when Washington Post columnist and MSNBC host Jonathan Capehart asked her about the future as Treasury head. 

“There is no truth to that,” Yellen said.  

The Hill’s Olafimihan Oshin has more here

Good to Know

Real estate prices are falling nationwide as mortgage rates surged past their highest point in more than a decade. But housing markets are cooling fastest in several California metros alongside pandemic-era boomtowns that were made possible by remote work.  

A new analysis from the financial technology website SmartAsset analyzed the
100 largest metro areas in the U.S., comparing them across eight metrics to determine which real estate markets are cooling fastest.  

Here’s what else we have our eye on: 

  • Micron Technology will invest up to $100 billion over the next two decades to build a semiconductor factory in upstate New York, the chipmaker announced Tuesday. 
  • The Federal Aviation Administration on Tuesday announced a new rule increasing the amount of rest time airlines must give flight attendants between shifts. 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

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