WASHINGTON – Job openings climbed in January, pointing to sustained gains in the U.S. labor market after the best year of hiring since 1999.
The number of positions waiting to be filled in the U.S. rose by 121,000 to 5 million in January, the highest level in 14 years, from a revised 4.88 million the prior month, the Labor Department reported today in Washington. The rate of hiring cooled, while the number of Americans quitting their jobs increased.
A steady rise in job listings is reinforcing signs of labor-market strength, as payroll advances have helped bring the unemployment rate down to its lowest level in almost seven years. At the same time, limited wage growth and lingering evidence of job-market slack have allowed Federal Reserve policy makers to be deliberate in considering their first interest-rate increase since 2006.
“The labor market is getting tighter and tighter,” said Stan Shipley, an economist at Evercore ISI in New York, who projected 5.03 million openings. “You’re seeing it in the unemployment rate going down and the job openings going up. It’s harder and harder to find people qualified to fill positions.”
The median forecast in a Bloomberg survey called for 5.05 million openings in January after a previously reported 5.03 million a month earlier. The Labor Department’s report reflected annual revisions to seasonally adjusted figures dating back to January 2010.
Stocks fell, wiping out gains for the year, as the dollar strengthened to near a 12-year high versus the euro on speculation the Fed is moving closer to raising rates. The Standard & Poor’s 500 Index declined 1.2 percent to 2,054.87 at 10:33 a.m. in New York.
Worker confidence
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 it lags the Labor Department’s other jobs data by a month, Fed Chair Janet Yellen follows the report as a measure of labor-market tightness and worker confidence.
Some 2.8 million people quit their jobs in January, up from 2.72 million a month earlier, today’s report showed. The quits rate rose to a three-month high of 2 percent in January from 1.9 percent.
The hiring rate – the number of people who got new jobs divided by the number who worked or were paid – dropped to 3.5 percent in January from 3.7 percent a month earlier. Hires fell to 5 million from 5.24 million, according to today’s figures.
February payrolls
The report follows figures last week that showed employers added 295,000 jobs in February, more than forecast, and the unemployment rate fell to 5.5 percent for its lowest reading since May 2008. Payrolls have increased an average 267,000 so far this year after almost 260,000 a month in 2014, which was the strongest since 1999.
A brighter outlook for demand is keeping companies such as Cincinnati-based Kroger Co., the biggest U.S. grocery-store chain, on pace to add to staffs.
“We continue to create jobs,” CEO Rodney McMullen said on a March 5 earnings call. “Kroger customers are increasingly positive about the economy since late last year through the new year. They are feeling more comfortable with their discretionary spending, in part due to the low retail price of fuel.”
Cheaper fuel is helping make up for sluggish wage growth. Average hourly earnings rose in the year to February at a 2 percent pace, matching the average since the expansion started in June 2009.
Underemployment rate
Some measures of slack on Yellen’s labor-market dashboard still haven’t returned to pre-recession strength. A gauge of underemployment, which includes those working part-time who would take a full-time position if one were available, improved in February to 11 percent. That compares with 8.8 percent in December 2007, when the last recession began.
The share of jobless who have been out of work for 27 weeks or longer is at 31.1 percent, almost twice as high than at the start of the last downturn.
Reggie Rounds of St. Louis is among those less upbeat employment outlook. The 57-year-old is a former Army food-service specialist and beer-delivery truck driver with a bachelor’s degree in sociology. He returned to school in 2012 to earn certificates in green building technology.
Rounds has been out of work since November, when funding for his job at Missourians Organizing for Reform and Empowerment, an organization advocating for low- and moderate-income people, ran out. He’s been shoveling snow and picking up other odd jobs to make ends meet.
Job hunting
“Bills are due and there’s not much money to pay them with,” Rounds said in a phone interview. He said he feels “kind of lost” since his training has over-qualified him for jobs, while others are demanding “previous experience” that he’s yet to attain.
About 1.8 people are vying for every opening, matching the ratio at the time the last recession began in December 2007, according to Tuesday’s report.
The figures today also showed that dismissals, which exclude retirements and people who quit voluntarily, fell to 1.67 million from 1.73 million in December.
In the year that ended in January, employers added a net 3.1 million jobs, representing 59.1 million hires and 56 million separations.
