Drop in Job Openings Tempers U.S. Hiring Prospects: EconomyLorraine Woellert
Job openings in the U.S. fell in April, showing companies were waiting to assess the effects of higher taxes and reduced government spending before committing to bigger staff increases.
The number of positions waiting to be filled fell by 118,000 to 3.76 million, the fewest since January, from a revised 3.88 million in March, the Labor Department reported today in Washington. The pace of hiring picked up and more people also left their jobs voluntarily, the figures showed.
Today’s data indicate it will be difficult for the world’s largest economy to keep adding jobs at May’s 175,000 pace as government spending cuts, known as sequestration, slow growth this quarter. Federal Reserve policy makers have said they want to see a “sustained” pickup in hiring before they begin dialing back record bond purchases meant to spur the expansion.
“We’re still stuck in this labor market where employers don’t have a lot of conviction,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. “You’re still talking about levels that are bouncing around in a range without a whole lot of upward tilt to it.”
Stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, after Bank of Japan Governor Haruhiko Kuroda said he sees no need to expand monetary stimulus immediately. The S&P 500 dropped 1 percent to 1,626.13 at the close in New York.
Elsewhere, industrial production in the U.K. rose in April, boosted by increased output at oil and water companies. It capped the strongest three-month gain in output in almost three years, adding to signs the economy is gaining momentum after stagnating in the first quarter.
Other reports today showed U.S. wholesalers increased inventories in April as sales climbed, and confidence among small companies rose in May to a one-year high as the economic outlook over the next six months brightened.
Today’s U.S. job openings data put the labor market picture in sharper focus after last month’s employment report, which showed the economy weathering the effects of spending cuts and higher taxes.
The May increase in payrolls reflected broad-based gains at private employers. The unemployment rate climbed to 7.6 percent from 7.5 percent as the number of people entering the labor force swamped the number of positions available, the Labor Department reported June 7.
Today’s Jobs Openings and Labor Turnover Survey, or JOLTS, showed the number of people hired climbed to 4.43 million in April from 4.23 million, pushing the hiring rate up to 3.3 percent from 3.1 percent. In 2007, the last year of the previous expansion, hiring averaged 5.19 million a month.
Job openings at manufacturers, health-care providers and hotels and restaurants accounted for the biggest decreases in available employment in April. The category encompassing trade, transportation and utilities showed the biggest gain, reflecting gains among retailers.
Angie Rodriguez, 52, quit her job in October when the golf course she managed in Reno, Nevada, reduced her hours and pay. Since then, she’s had no luck finding a position where she can use her executive experience.
“I’m applying for anything I can find myself a little bit qualified for,” Rodriguez said. “Let’s just go in and get a job and get a paycheck.”
A separate survey of U.S. employers released today found that while more companies plan to hire in the third quarter of this year, more also intend to reduce staff levels. Seventy percent said they would maintain their current headcount.
A gauge of the employment outlook rose to 12 percent from 11 percent, Milwaukee-based ManpowerGroup Inc. reported. The share of companies planning to increase staff levels rose to 22 percent, a four-year high, the survey found.
Total firings, which exclude retirements and those who left their job voluntarily, decreased to 1.65 million from 1.69 million a month before, today’s Labor Department report showed. Another 2.25 million people quit their jobs in April, up from 2.1 million the prior month.
That drove the separations rate higher to 3.2 percent from 3 percent in March.
In the 12 months ended in April, the economy created a net 1.8 million jobs, representing 52 million hires and about 50.2 million separations.
Today’s figures indicate there are about 3.1 job seekers for every opening, up from about 1.8 when the recession began in December 2007.
The Federal Open Market Committee has pledged to press on with its record $85 billion a month in asset purchases until members see bigger gains in job creation.
Fed Vice Chairman Janet Yellen has said an increase in the number of people voluntarily quitting their jobs could be one sign of improvement. More quits signal that “workers perceive that their chances of being rehired are good -- in other words, that labor demand has strengthened,” Yellen said in a March 4 speech.
The quits rate, at 1.7 percent in April, is little changed from a year ago, when it was 1.6 percent. It averaged 2 percent during the previous expansion and went as high as 2.3 percent in late 2006.
Increased demand for automobiles and the recovery in the housing market are encouraging those industries to hire.
Ford Motor Co. said on May 22 that it’s taking on more workers as increased demand prompts the second-largest U.S. automaker to add capacity to build 200,000 more vehicles annually in North America.
The Dearborn, Michigan-based automaker plans to add almost 3,500 hourly workers in the U.S. this year, and all of those will be new additions at an entry-level wage, said Jim Tetreault, vice president of North America manufacturing.
Earlier in the month, the second-largest U.S. automaker said that it will hire a third crew at its Claycomo, Missouri, plant to boost F-150 output starting in the third quarter. Ford is adding more than 2,000 workers at the factory for the expanded production of its most profitable model line and to begin building the Transit commercial van in mid-2014.
It’s also adding a second shift of 1,200 workers to its Mustang assembly plant in Flat Rock, Michigan, to start building Fusions there in the third quarter.
“The sales and marketing guys are obviously very confident, because they’ve asked for additional capacity, and we’re providing it,” Tetreault said in a telephone interview.
Titan Machinery Inc. is recruiting managers and expanding its sales force to drive revenue in its construction segment, while Home Depot Inc. is increasing staffing as sales improve.
“Where sales are picking up, our staffing has increased,” Home Depot Executive Vice President Marvin Ellison said on a May 21 earnings call. “As we forecast events, new product introductions, we will adjust our staffing to make sure we have customers served in a most appropriate way.”