Job openings increased in May after plunging the prior month, easing concern the U.S. job market was faltering.
The number of positions waiting to be filled climbed by 195,000 to 3.64 million, partially countering the 294,000 drop seen in April, the Labor Department said today in Washington. Another report showed confidence among small companies slumped in June.
Increasing demand for workers indicates some companies see an opportunity to expand as sales improve. At the same time, the report showed firings also picked up, indicating the European debt crisis and slowing growth in emerging markets like China may be prompting some employers to cut back.
“The labor market still looks pretty tenuous,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. The April report “sent some worrying signals that maybe things were in free fall. You have the May report and you can see businesses were turning a bit more cautious, but they weren’t completely pulling back.”
Stocks fell for a fourth day as pessimism about the earnings season grew. The Standard & Poor’s 500 Index dropped 0.8 percent to 1,341.47 at the close in New York. The yield on the benchmark 10-year Treasury note decreased to 1.50 percent from 1.51 percent late yesterday.
Elsewhere, manufacturing in the U.K. unexpectedly surged in May by the most in a year, reflecting an additional working day after a public holiday was moved to last month. In China, imports rose less than anticipated in June, pushing the trade surplus to a three-year high and adding pressure on the government to support demand as the global economy slows.
Confidence among U.S. small companies dropped in June to its lowest point since October, driven by concern that sales and the economy will deteriorate, another report today showed.
The National Federation of Independent Business’ optimism index fell to 91.4 from 94.4 in May, the biggest monthly decline in two years. Eight of its 10 components contributed to the slump, the Washington-based group said.
“The immediate future doesn’t look good,” William Dunkelberg, the group’s chief economist, said in an interview. “Nobody really expects business conditions and consumer spending to get any better.”
The increase in job openings in May reported by the Labor Department was broad-based, led by manufacturers and state and local government agencies, according to today’s report. Only employers in the arts and entertainment industry had fewer jobs available.
Employment climbed by 148,000 to 4.36 million in May, pushing the hiring rate up to 3.3 percent from 3.2 percent the prior month. Professional and business services, which include temporary-help agencies, and health-care providers saw the biggest increases in staffing.
Catalog Spree, which developed an application for mobile devices that allows users to browse and shop in catalogs, has grown to between double and triple the size Chief Executive Officer Joaquin Ruiz envisioned when he started the firm in April 2011. The Los Altos, California-based company now employs 16 workers, up from 3 at the start, a number that may keep expanding, Ruiz said.
“We’re going to continue hiring in order to both address our number of users in a more personalized fashion, which requires more minds at work, and our need for more content,” Ruiz said in a June 29 interview. “It is extremely challenging to find the right people.”
Total firings, which exclude retirements and those who left their jobs voluntarily, increased to 1.89 million in May, the most since July 2010, from 1.74 million a month before, today’s report showed.
About another 2.12 million people quit their jobs in May, little changed from 2.11 million the prior month. That pushed the total separations rate to 3.3 percent, the highest since June 2010.
“Companies are hiring the minimum number of people needed to do the additional work that needs to be done,” Carl Camden, president and chief executive officer at staffing provider Kelly Services Inc., said last week on Bloomberg’s “Hays Advantage” with Kathleen Hays. “They are not making investments in new products, new ventures, new software beyond what they have to. They are not going to until there is more economic certainty, policy certainty, and the situation in Europe clears up.”
In the 12 months ended in May, the economy created a net 1.8 million jobs, representing 51.1 million hires and about 49.3 million separations, today’s report showed.
Considering the 12.7 million Americans who were unemployed in May, today’s figures indicate there are about 3.5 people vying for every opening, up from about 1.8 when the recession began in December 2007.
The openings report helps illuminate the dynamics behind the monthly employment figures, which were released last week.
Payrolls climbed by 80,000 workers in June, less than forecast in a Bloomberg News survey, after a revised 77,000 gain in May that was larger than initially estimated, the Labor Department said July 6. The jobless rate held at 8.2 percent.