U.S. Job Openings Rose in July as Slower Hiring Signals Lack of Confidence
Job openings in the U.S. rose in July for a third month, while a slowdown in hiring showed businesses lacked the confidence to take on new staff.
The number of positions waiting to be filled climbed by 59,000 to 3.23 million, according to Labor Department figures issued today in Washington. Hiring decreased by 74,000 to 3.98 million.
Payrolls were unchanged in August, the weakest showing since September 2010, while revised data last month showed the world’s largest economy grew at a 0.7 percent annual pace in the first half of 2011. Concern the recovery is faltering may cause employers to delay hiring plans even further.
“We see more of the same: very weak labor demand, very weak hiring,” Henry Mo, a senior economist at Credit Suisse in New York, said before the report. “It’s very clear the financial turmoil has dampened both consumer and business confidence. I wouldn’t be surprised if businesses continue to hold off on hiring and even downsize original hiring intentions.”
Job openings increased 1.9 percent in July from a revised 3.17 million in June that was higher than initially reported, the data showed.
The gain in vacancies was led by manufacturing and trade, transportation and utilities.
Today’s report helps shed light on the dynamics behind the monthly employment figures. The absence of job creation in August followed an 85,000 gain the prior month, Labor Department figures showed Sept. 2.
Employers discharged 1.7 million workers in July, down from 1.77 million in June, the report also showed. Total separations, which include firings, retirements and those who left their jobs voluntarily, decreased to 3.92 million from 3.99 million a month before.
In the 12 months ended in July, the economy created a net 1.1 million jobs, representing about 47.8 million hires and about 46.6 million separations, today’s report showed.
Compared with the 13.93 million Americans who were unemployed in July, today’s figures indicate there were more than four people vying for every opening, up from about two when the last recession began in December 2007.
The number of jobless rose to 13.97 million in August, while the unemployment rate held at 9.1 percent, the Labor Department reported last week.
Debate in Washington over the budget and mounting fear of a default in Europe caused the Standard & Poor’s 500 Index to plummet 17 percent from July 22 to Aug. 8, making companies and consumers more pessimistic. The lack of hiring is one reason why Federal Reserve Chairman Ben S. Bernanke last month said the central bank still has tools available to stimulate growth.
Bernanke on Economy
“Economic growth has, for the most part, been at rates insufficient to achieve sustained reductions in unemployment,” Bernanke said Aug. 26 at the Jackson Hole, Wyoming, central bank symposium. “It is clear that the recovery from the crisis has been much less robust than we had hoped.”
Banks have been among companies announcing the biggest dismissals. Bank of America Corp. (BAC), the biggest U.S. lender, will eliminate about 3,500 jobs this quarter to focus “on what we can control” amid market turmoil, said Chief Executive Officer Brian T. Moynihan on Aug. 19.
President Barack Obama may press Congress for tax cuts that would exceed his past proposals as well as some of the offerings from House Republicans to strengthen his hand in talks on measures to boost the U.S. economy, according to a person familiar with the discussions.
With Obama set to lay out his plans in an address tomorrow to Congress, the administration is focusing on cuts targeted at middle-income Americans to spur consumer spending, which accounts for 70 percent of the economy, said the person, who spoke on condition of anonymity.
To contact the reporter on this story: Bob Willis in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Christopher Wellisz at email@example.com