The Effect of Higher Financing Costs on Job Openings and Online Job Postings

RePEc Short ID: phe765
ORCID iD: 0000-0003-4918-3111

Bailey, Adiah; Hernandez Martinez, Victor

doi:10.26509/frbc-ec-202309

Journal Article

The Effect of Higher Financing Costs on Job Openings and Online Job Postings

Abstract: In this Economic Commentary, we consider whether the declines in vacancies seen in the second half of 2022 could have been driven by monetary policy tightening. We look at whether the variation in this decline across industries and states was consistent with increases in the federal funds rate. Our first strategy focuses on variation at the industry level in exposure to higher borrowing costs. Our second leverages geographic differences in the effect of monetary policy tightening on financing costs. Both strategies suggest that monetary policy is, at least in part, responsible for the recent decline in vacancies.

Keywords: job vacancies; monetary policy; federal funds rate;

https://doi.org/10.26509/frbc-ec-202309