Job openings in the U.S. dropped in July, indicating employment growth may be hard-pressed to pick up through year-end.
The number of positions waiting to be filled fell by 58,000 to 3.66 million, the Labor Department said today in a statement. Hiring and separations also cooled.
Companies are reluctant to add workers as Europe’s debt crisis slows global markets and the so-called U.S. fiscal cliff of automatic tax increases and spending cuts looms at the end of 2012. Persistent unemployment, a “grave concern” according to Federal Reserve Chairman Ben S. Bernanke, is a hurdle for consumer spending, which makes up about 70 percent of the economy.
“Firms are going to remain cautious about adding jobs,” Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “Demand is lackluster. All the uncertainty is still there.”
Today’s report helps shed light on the dynamics behind the monthly employment figures.
Payrolls rose by 96,000 workers in August after a revised 141,000 increase in July that was smaller than initially estimated, the Labor Department said on Sept. 7. The median estimate of economists in a Bloomberg survey called for a 130,000 advance. Private payrolls, which exclude government agencies, rose 103,000 after a revised gain of 162,000.
The number of people hired fell to 4.23 million in July from 4.28 million the previous month, while the hiring rate held at 3.2 percent, today’s report showed.
Job openings decreased in manufacturing, professional and business services, and education and health services.
Companies reducing staff include Mountain View, California-based Google Inc., which plans to cut about 4,000 positions at its Motorola Mobility Holdings Inc. unit, with about one-third of the reductions coming in the U.S. Printer maker Lexmark International Inc. will shed 1,700 jobs globally.
Total firings, which exclude retirements and those who left their job voluntarily, decreased to 1.55 million from 1.76 million a month before, today’s report showed.
About another 2.16 million people quit their jobs in July, up from 2.13 million in the prior month. The separations rate fell to 3 percent.
In the 12 months ended in July, the economy created a net 1.8 million jobs, representing 51.4 million hires and about 49.6 million separations, today’s report showed.
Considering the 12.8 million Americans who were unemployed in July, 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 payrolls report last week showed the unemployment rate unexpectedly dropped to 8.1 percent from 8.3 percent as more Americans left the labor force. The rate has been stuck above 8 percent since February 2009, the longest stretch in monthly records going back to 1948.
The lack of progress in the labor market helps explain why Federal Reserve policy makers meeting this week may opt for additional easing to boost the economy. The U.S. has managed to recover 4.1 million of the 8.8 million jobs lost as a result of the 18-month recession that ended in June 2009.