Job Openings Rise in April to More Than 14-Year High
Job openings in the United States increased to the highest level in more than 14 years, showing the labor market was solidifying gains even as the economy emerged from a first-quarter funk.
The number of positions waiting to be filled increased by 267,000 to 5.38 million in April from a revised 5.11 million the prior month, the Labor Department reported June 9. The rate of hiring decreased, while the firing rate and the number of Americans quitting their jobs were little changed.
The data are further evidence of increasing vitality in the labor market even as the world’s largest economy slumped at the start of the year. More vacancies signal employment will remain firm after May saw the strongest pace of hiring so far this year, which could add pressure on employers to increase wages as the supply of applicants dwindles.
“The labor market is tightening,” Thomas Costerg, a senior economist at Standard Chartered Bank in New York, said before the report. “Firms need to probably think more about their compensation policy to keep workers.”
The median forecast in a Bloomberg News survey projected openings would climb to 5.04 million in April from a previously reported 4.99 million a month earlier. April’s openings were the highest since the Labor Department started reporting the statistics at the end of 2000.
The Job Openings and Labor Turnover Survey, or JOLTS, adds context to monthly payrolls/ figures by measuring dynamics such as resignations, help-wanted ads and the pace of hiring. Although the report lags the Labor Department’s other jobs data by a month, Fed Chair Janet Yellen follows it as a measure of labor-market tightness and worker confidence.
Some 2.7 million people quit their jobs in April, little changed from March, the report showed. The quits rate, which was 2% when the recession started at the end of 2007, fell to 1.9% in April from 2% in March.
“The measures of the strong economy are pointing in the same direction,” Labor Secretary Tom Perez said in a June 5 phone interview. “People don’t quit unless they think they’re going to get a better job.”
The hiring rate — the number of people who got new jobs divided by the number who worked or were paid — fell to 3.5% in April from 3.6%. Hires decreased to 5.01 million from 5.09 million, according to the June 9 figures.
The report follows figures last week that showed employers added 280,000 workers to payrolls in May, more than forecast, and the unemployment rate edged up to 5.5% from 5.4% as more Americans entered the workforce.
In another sign of a tightening job market, the number of workers saying they are so discouraged by job prospects that they’ve given up looking dropped by 193,000 in May to 563,000, the fewest since October 2008.
The April data show the employment picture has remained resilient after the strongest year for job gains since 1999, even as other parts of the economy suffered under a stronger dollar, West Coast port labor disruptions and severe weather in the first quarter. Monthly job gains have averaged 217,400 so far this year after an average 259,670 in 2014.
Wage growth has been slower to materialize in this expansion. Average hourly earnings showed more signs of life in May, with the year-over-year increase in wages climbing to 2.3% for the highest since August 2013. A separate Labor Department measure of paychecks, the Employment Cost Index, rose in the first quarter by the most since the end of 2008.
Employers including Dublin, California-based Ross Stores Inc. are seeing faster pay increases on the horizon.
“We expect wage rates are going to move up over the next few years,” Chief Financial Officer Michael Hartshorn said in a May 21 earnings call. Even as labor costs rise, “there is a silver lining here in that the customer has more money in their pocket because of higher wage rates that could well help our top line as well.”
About 1.6 people are vying for every opening, compared with about 1.8 when the last recession began in December 2007, according to the report.
The figures also showed that dismissals, which exclude retirements and people who quit voluntarily, dropped to 1.82 million from 1.89 million in March.
In the year that ended in April, employers added a net 2.8 million jobs, representing 60 million hires and 57.2 million separations.
