Job Openings at Five-Year High Signal U.S. Rebound: EconomyShobhana Chandra
Job openings climbed in February to the highest level in almost five years, signaling U.S. employers were preparing to expand before federal government budget cuts took effect last month.
The number of positions waiting to be filled rose by 314,000 to 3.93 million, the most since May 2008, from a revised 3.61 million the prior month, the Labor Department said today in Washington. The pace of hiring increased to a three-month high.
The report, which followed data last week showing payroll gains cooled in March from a one-year high, indicates the labor market was gaining momentum before across-the-board cuts in government spending went into effect on March 1. Federal Reserve policy makers are waiting for a sustained pickup in hiring and a drop in the unemployment rate before tapering record stimulus.
“It makes you wonder if the March payrolls report was an anomaly,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who projected openings would increase. “Things are getting better. Job openings will continue to improve.”
Stocks rose, giving the Standard & Poor’s 500 Index its first back-to-back gain in more than three weeks, on optimism over corporate earnings and as commodities gained amid a report showing China’s inflation slowed. The S&P 500 climbed 0.4 percent to 1,568.61 at the close in New York.
Today’s report on job openings helps shed light on the dynamics behind the monthly employment figures.
Payrolls jumped by 268,000 workers in February, the biggest gain in a year, after rising 148,000 in the prior month, Labor Department data showed on April 5. The advance slowed to 88,000 in March. The jobless rate dropped to 7.6 percent last month, the lowest since December 2008, from 7.7 percent in February.
The number of people taken on increased to 4.42 million in February. Total hirings as a share of overall employment climbed to 3.3 percent, a three-month high.
The pace of additions to payrolls is taking on added significance among Fed policy makers. Central bankers reiterated in a March 20 statement that they would continue $85 billion of monthly bond purchases until the labor market outlook improves “substantially.” Each month the Fed is purchasing Treasuries and mortgage bonds to keep interest rates low, spur economic growth and trim unemployment.
During a press conference following the meeting last month, Fed Chairman Ben S. Bernanke said central bankers want to see “sustained improvement across a range of indicators,” including wages, jobless claims and the hiring rate.
February’s jump in openings, the biggest since March 2012, was led by a surge among health-care providers and the hospitality industry, including hotels and restaurants. Retailers showed a decrease in help wanted for the month.
David Heideman, 50, who has been unemployed since October, had two job interviews on April 5 and is optimistic he’ll be asked back for a second round of talks this week. His job as a software developer at Ciber Inc.’s Global Solutions Center in Tampa, Florida, ended in October when the firm started having the work done from India, Heideman said.
Of the two openings for which Heideman is applying, one is a temporary spot in desktop support at a reduced salary, and the other is a permanent post as a foreclosure forecaster at a major bank in Tampa. It took Heideman a year to find work after being laid off from JPMorgan Chase & Co. in 2008 during the recession.
“It’s getting better, I’m very optimistic,” said Heideman, who said he’s restricted in his search because his wife has a good job in Palmetto, a small town 45 minutes south of Tampa. “There are jobs out there.”
Total firings, which exclude people who retirement or left their jobs voluntarily, increased to 1.62 million in February from 1.52 million the prior month that were the fewest since records began in December 2000, today’s report showed.
Another 2.26 million people quit their jobs in February, about the same as in the prior month. That kept the total separations rate at 3.1 percent.
In the 12 months ended in February, the economy created a net 1.9 million jobs, representing 52 million hires and about 50.1 million separations.
Considering the 12 million Americans who were unemployed in February, today’s figures indicate there are about 3.1 people vying for every opening, up from about 1.8 when the recession began in December 2007.
Businesses taking steps to reduce labor expenses include FedEx Corp., an economic bellwether that moves goods as varied as medical supplies and auto parts. Memphis, Tennessee-based FedEx, as part of a plan announced in October to cut spending and boost profits by $1.7 billion over three years, said it is offering voluntary buyouts and delayed filling openings.
“Significantly deferred hiring of open positions reduced our need to offer voluntary buyouts in some cases,” Alan Graf, chief financial officer of the package-delivery company, said in an earnings conference call on March 20.
Recent reports have added to concern that automatic across-the-board government budget cuts, known as sequestration, will impede the progress made in the job market and the economy. The reductions in planned spending, which began on March 1 because Congress couldn’t compromise on a debt-reduction strategy, trim 5 percent from domestic agencies and 8 percent for the Defense Department this fiscal year.
A measure of job prospects in March fell for the first time in six months, the Conference Board reported yesterday. The New York-based private research group’s Employment Trends Index decreased 0.2 percent to 111.2, from a revised 111.43 that was the highest level since June 2008.