Job openings in the U.S. eased in March from the highest level in almost five years, indicating employers are waiting to see how the economy performs as federal budget cuts take effect.
The number of positions waiting to be filled declined by 55,000 to 3.84 million from a revised 3.9 million the prior month that were the most since May 2008, the Labor Department said today in Washington. The report also showed hiring decelerated and firings climbed.
Companies may be reluctant to add staff amid signs the expansion is slackening this quarter as the January increase in the payroll tax catches up with consumers and across-the-board reductions curb federal outlays. While hiring accelerated last month, bigger gains are needed to propel wage gains and revive economic growth in the second half of 2013.
“Job growth is proceeding at a pretty moderate pace,” said Robert Mellman, a senior economist at JPMorgan Chase & Co. in New York. “The tax hikes went up early in the year, we got this slowdown in retail sales, this slowdown in manufacturing output, and that raised the question about whether businesses would get very defensive or not. It looks like they slowed payroll growth in March and April.”
Stocks climbed, sending the Standard & Poor’s 500 Index to its fourth-straight record close, on optimism over global central bank stimulus and better-than-estimated corporate earnings. The S&P 500 increased 0.5 percent to 1,625.96 at the close in New York.
Elsewhere, the outlook for the euro area brightened today after a report showed German factory orders unexpectedly jumped in March for a second month, indicating Europe’s largest economy is starting to grow again.
Today’s U.S. job openings report sheds light on the government’s monthly employment data. Payrolls grew by 138,000 workers in March, a step down from the 332,000 pace in February that was the fastest in almost three years, the Labor Department reported last week. Job creation accelerated in April, with payrolls rising by 165,000.
The number of workers hired in March fell to 4.26 million, pushing the hiring rate down to 3.2 percent from 3.3 percent, according to today’s report.
Job openings slipped most at professional and business services, followed by health care and social assistance agencies. Retailers, hotels and restaurants were among the employers putting out more help-wanted signs in March.
The number of dismissals climbed to 1.69 million in March, a four-month high, from 1.57 million the prior month. Another 2.16 million workers quit their jobs, down from 2.29 million in the prior month. The combination kept the total separations rate at 3.1 percent in March for a third month.
In the 12 months ended in March, the economy created a net 1.7 million jobs, representing 51.8 million hires and about 50.1 million separations, today’s report showed.
Considering the 11.7 million Americans who were unemployed in March, the figures indicated there were about 3 people vying for every opening, up from about 1.8 when the recession began in December 2007.
Randy Marek knows how tough it is to compete. The 55-year-old former account executive and project manager, who lives north of San Francisco, lost his job in early 2010 and has since taken a number of contract jobs after failing to keep full-time work.
“What I’ve been trying to do is just to keep myself in front of networking, in front of people that I know,” said Marek, noting that he spends at least 30 hours each week job searching. “I just know if I get in the right place, I’ll be a big asset. I just don’t know why I can’t.”
Federal Reserve officials have indicated they’re waiting to see additional evidence that recent employment gains will prove durable before trimming record stimulus.
Central bankers said on May 1 they plan to keep buying $85 billion of bonds per month to facilitate labor market progress. They were prepared to raise or lower the pace as the economic outlook evolves, they also said.
Fed Vice Chairman Janet Yellen has said she will monitor data beyond the Labor Department’s monthly jobs report to determine whether the job market is strengthening. Some of the figures she cited come from today’s report on openings.
“Layoffs and discharges as a share of total employment have already returned to their pre-recession level, while the hiring rate remains depressed,” Yellen said during a March 4 speech. “Therefore, going forward, I would look for an increase in the rate of hiring.”
A pickup in the rate at which people quit their jobs will also provide a clue that the labor market is recovering, Yellen said. More workers leaving their position in search of another indicates they are confident about prospects and that demand for labor has strengthened, she said.
With hiring and quits cooling and firings picking up, today’s report will probably not give Yellen, who is seen as a possible successor to Fed Chairman Ben S. Bernanke when his term ends next year, much confidence the job market is on the mend.
Companies that are hiring, such as Burlington Northern Santa Fe LLC, could change that view. Matt Rose, the railroad’s chief executive officer, said during a May 6 interview on Bloomberg Television that his company will increase its staff by about 1 percent this year to accommodate demand from increased energy production and consumer spending.
Another sign pointing to employment gains is provided by advertisements for job openings posted online, which are becoming more plentiful. The number of help-wanted ads rose in April to 5.1 million, reaching the highest level in records going back to 2005, according to data compiled by the Conference Board.
At the same time, economists project the pace of economic growth will cool this quarter, limiting employers’ need to hire. The nation’s gross domestic product will expand at a 1.5 percent annualized pace from April through June, down from a 2.5 percent rate in the prior three months, according to a Bloomberg survey from April 5 to April 9.
The slowdown comes as higher taxes pinch consumers, factories reduce inventory building and production and the government cuts back on planned outlays.