The number of jobs waiting to be filled in the U.S. climbed in August to the highest level in 13 years as employers gained confidence to expand their workforces.
Openings rose to 4.84 million in August, the most since January 2001, from a revised 4.61 million the prior month, according to Labor Department data issued today in Washington. The report also showed hiring and firing cooled, while fewer people quit their jobs.
The upswing in openings helps explain the rebound in payrolls last month that pushed the jobless rate to a six-year low and signaled Americans can look forward to sustained gains in hiring into 2015. The figures form part of a package of data Federal Reserve Chair Janet Yellen and her colleagues use to measure the labor market’s health, which will help determine when the central bank starts to raise its benchmark interest.
“The job market remains healthy,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. “Job openings have some indicative power beyond just one month ahead. It probably isn’t decisive, but it does tell you conditions are going to be pretty good for hiring in the fourth quarter.”
Stocks declined, with the Standard & Poor’s 500 Index falling a second day, as the International Monetary Fund cuts it growth forecast and warned of “frothy” equities amid signs of slowing growth in Europe. The S&P 500 dropped 0.7 percent to 1,951.95 at 1:50 p.m. in New York.
The median forecast in a Bloomberg survey of economists called for 4.7 million openings after a previously reported 4.67 million in July.
The number of jobs available climbed by 910,000 in the year ended August, the biggest 12-month gain since records began in December 2000.
Today’s Job Openings and Labor Turnover Survey, known as JOLTS, showed employers hired 4.64 million people in August, down from 4.93 million the month before.
The hiring rate dropped to 3.3 percent, the lowest since January, from 3.6 percent in July. The rate calculates the number of hires divided by the number of employees who worked or received pay during the month.
Yellen has been among those saying the divergence between hiring and openings could point to economic slack.
“Given the rise in job vacancies, hiring may be poised to pick up, but the failure of hiring to rise with vacancies could also indicate that firms perceive the prospects for economic growth as still insufficient to justify adding to payrolls,” Yellen said Aug. 22 in a speech at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming. “Alternatively, subdued hiring could indicate that firms are encountering difficulties in finding qualified job applicants.”
Phillip Hogan, 56, is among those having a hard time finding work. He has applied for 20 openings since he lost his job at a non-profit housing group two months ago. He wants to stay in the Atlanta area, where he lives, but it’s been difficult, even with a master’s degree in public administration.
“In banking, legal, or engineering I would have gotten a job yesterday,” he said. “It’s just that my industry is a narrow lane.”
Health-care providers, retailers and hotels and restaurants were among the industries showing the biggest increases in openings in August, a sign that jobs waiting to be filled were at the lower end of the pay scale.
“As the economy recovers you’re going to get people spending more discretionary income, like taking vacations or going out to restaurants,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “So it’s not unusual to see better employment at amusement parks and restaurants.”
Over time, other jobs will be created and wages will start to go up, he said.
The level of openings indicates employers may start having trouble finding qualified help and means “that upward pressure on wage gains is just a matter of time,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Inc. in White Plains, New York, said in a research note.
Employers are also making efforts to retain existing staff as the number of dismissals, which excludes retirements and those who left their job voluntarily, fell to 4.44 million from 4.63 million in July, today’s report showed.
Measures in the JOLTS report are among the nine indicators on Yellen’s labor-market dashboard, which she uses to help guide monetary policy. Just three gauges -- the job openings rate, payrolls and the pace of dismissals -- have exceeded their pre-recession averages, indicating there’s still room for improvement among the remaining job-market gauges.
The number of people leaving their jobs voluntarily is one JOLTS reading on the dashboard that is lagging behind. An increase indicates workers are confident they can find other employment quickly.
Some 2.47 million people quit their jobs in August, the fewest since April and down from 2.55 million. The quits rate held at 1.8 percent. It averaged 2.1 percent in the four years leading up the last recession.
“The hiring rate fell and the quits rate was flat, and those were the ones Janet Yellen highlighted,” said Brown. “It’s very much a mixed bag, but nothing that suggests the Fed is going to take away the punch bowl any time soon.”
The Fed last month tapered monthly bond buying to $15 billion in their seventh consecutive $10 billion cut, staying on course to end the purchase program this month. Policy makers also stuck to their pledge to keep interest rates near zero for a “considerable time” after the Fed stops buying assets.
“There are still too many people who want jobs but cannot find them, too many who are working part time but would prefer full-time work,” Yellen said during a Sept. 17 press conference after the central bank’s last policy meeting. That “significant underutilization of labor resources” is keeping lid on wages, she said.
Considering the 9.59 million Americans who were unemployed in August, today’s figures indicate there are about 2 people vying for every opening, up from about 1.8 when the last recession began in December 2007.
A Labor Department report last week showed employers added 248,000 jobs in September after a 180,000 increase the prior month, and the unemployment rate dropped to 5.9 percent, the lowest since July 2008.
(An earlier version of this story corrected penultimate paragraph to show number of ‘unemployed.’)