WASHINGTON – Job openings in the U.S. climbed to a five-year high in September, indicating employers were confident about demand before the federal government shutdown.
The number of positions waiting to be filled in the U.S. rose by 69,000 to 3.91 million, the highest since May 2008, from a revised 3.84 million in August, the Labor Department reported today in Washington. The pace of hiring increased.
Further gains in the job market would help drive wage growth and boost consumer spending, which accounts for almost 70 percent of the economy. Employers have added 186,300 workers on average from January through October, up from an average of about 173,000 in the same period last year.
“Things are genuinely getting better,” said Brian Jones, senior U.S. economist at Societe Generale in New York. “I don’t think we’re at the point where people will quit without having something in hand, but hopefully we’re moving in that direction.”
The median forecast in a Bloomberg survey of economists called for 3.85 million openings in September after a previously reported 3.88 million a month earlier.
The Job Openings and Labor Turnover report is among data monitored by Janet Yellen, the nominee for Federal Reserve chairman, and helps shed light on the dynamics behind the monthly employment figures.
Payrolls expanded by 204,000 workers last month after rising 163,000 in September, a Labor Department report showed on Nov. 8. The jobless rate rose to 7.3 percent in October after as many as 800,000 federal workers were furloughed during the 16- day government shutdown.
Hiring rate
Today’s report showed the number of people hired increased to 4.59 million in September, the most since August 2008, from 4.56 million. The hiring rate rose to 3.4 percent from 3.3 percent in August. The gauge calculates the number of hires during the month divided by the number of employees who worked or received pay during that period.
Job openings increased at construction companies, retailers, professional and business services, and in the trade, transportation and utility industries.
The number of total dismissals, which excludes retirements and those who left their job voluntarily, rose to 1.73 million from 1.68 million in August.
Some 2.34 million people quit their jobs in September, down from 2.36 million the prior month. The quits rate, which shows the willingness of workers to leave their jobs, held at 1.7 percent in September, down from a 2.1 percent reading when the recession started almost six years ago.
Fed’s Yellen
An increase in the gauge would indicate that “workers perceive that their chances to be rehired are good – in other words, that labor demand has strengthened,” Yellen said in a March speech before the National Association for Business Economics.
In the 12 months ended September, the economy created a net 1.9 million jobs, representing 52.7 million hires and 50.8 million separations.
Considering the 11.3 million Americans who were unemployed in September, today’s figures indicate there are about 2.9 people vying for every opening, up from about 1.8 when the last recession began in December 2007.
Payrolls data released earlier this month also showed that private employment, which excludes government agencies, rose 212,000 in October, the most in eight months.
Holiday hiring
Retailers are among those adding employees in anticipation of holiday demand, with Amazon.com Inc. expected to hire 40 percent more workers than last year and Wal-Mart Stores Inc. taking on 10 percent more seasonal employees and an additional 700,000 workers. In total, retailers added 159,000 holiday jobs in October, the strongest start to the season in 14 years, according to employment consulting firm Challenger, Gray & Christmas Inc.
Other businesses are taking steps to cut staff. Lockheed Martin Corp., the largest U.S. government contractor, said Nov. 14 it will cut 4,000 jobs and close some operations in response to decreased federal spending. HJ Heinz Co., the ketchup-maker owned by Warren Buffett’s Berkshire Hathaway Inc. and 3G Capital, said it will fire 1,350 workers as it closes manufacturing plants in North America.
Fed officials are gauging the outlook for the labor market as they consider scaling back their $85 billion-a-month bond-buying program, known as quantitative easing. Policy makers this week signaled they may taper “in coming months” if the economy improves as anticipated.
Fed officials “generally expected that the data would prove consistent with the committee’s outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months,” according to the record of the Federal Open Market Committee’s Oct. 29-30 gathering, released Nov. 20 in Washington.
