More Job Openings Move Needle on Yellen Dashboard: EconomyMichelle Jamrisko
More signs on Janet Yellen’s labor dashboard are flashing green.
Job openings at U.S. employers -- part of a report that the chair of the Federal Reserve and her colleagues watch closely -- rose to 5 million in January, a 14-year high, the Labor Department reported Tuesday in Washington. Job listings increased at factories, restaurants and transportation companies.
The report also showed more Americans quit their jobs than at any time since April 2008, signaling growing confidence in finding a position elsewhere. The figures are among those monitored by Fed policy makers to help them determine when to raise their benchmark interest rate.
“The labor market is getting tighter and tighter,” said Stan Shipley, an economist at Evercore ISI in New York, who projected 5.03 million openings. “You’re seeing it in the unemployment rate going down and the job openings going up. Somewhere down the road, wage gains are going to start to accelerate.”
Some 2.8 million people left their jobs voluntarily in January compared with 2.72 million a month earlier, the report showed. The quits rate rose to 2 percent in January, matching the highest level since April 2008, from 1.9 percent.
“An important bellwether of a vibrant economy is when people are willing to voluntarily leave their job because they think they can get a better job,” Labor Secretary Thomas Perez said in a phone interview. “People are no longer fearful to leave their jobs. They think they can get a better job. That’s really one of the best ways to increase your wages and your standard of living.”
Stocks fell, wiping out gains for the year, as the dollar strengthened to an almost 12-year high versus the euro on speculation the Fed is moving closer to raising rates. The Standard & Poor’s 500 Index declined 1.7 percent, the most since Jan. 5, to 2,044.16 at the close in New York.
The median forecast in a Bloomberg survey called for 5.05 million job openings in January after a previously reported 5.03 million a month earlier. The Labor Department’s report reflected annual revisions to seasonally adjusted figures dating back to January 2010.
Job openings at restaurants and hotels increased by 103,000 to 689,000 in January, the most since records began in 2000. The Labor Department’s latest employment report shows companies in those industries were having success filling positions, as payrolls climbed 60,000 in February. There were also 20,000 more listings at factories and 45,000 within trade and transportation.
The Job Openings and Labor Turnover Survey, or JOLTS, adds context to monthly payrolls figures by measuring dynamics such as resignations, help-wanted ads and the pace of hiring. Although it lags the Labor Department’s employment report by a month, Yellen tracks the data to measure of labor-market tightness and worker confidence.
The hiring rate -- the number of people who got new jobs divided by the number who worked or were paid -- dropped to 3.5 percent in January from 3.7 percent a month earlier. Hires fell to 5 million from 5.24 million.
“Employers are taking their time filling openings or are having a hard time finding qualified candidates,” Sarah House and Erik Nelson, economists at Wells Fargo Securities LLC in Charlotte, North Carolina, said in an e-mail to clients.
The report follows Labor Department figures last week that showed employers added 295,000 jobs in February, more than forecast. The jobless rate fell to 5.5 percent, the lowest since May 2008. Payrolls have increased an average 267,000 so far this year compared with almost 260,000 a month in 2014, which was the strongest since 1999.
A brighter sales outlook is keeping companies such as Cincinnati-based Kroger Co., the biggest U.S. grocery-store chain, on pace to add to staffs.
“We continue to create jobs,” Chief Executive Officer Rodney McMullen said on a March 5 earnings call. “Kroger customers are increasingly positive about the economy since late last year through the new year. They are feeling more comfortable with their discretionary spending, in part due to the low retail price of fuel.”
Cheaper fuel is helping make up for sluggish wage growth. Hourly earnings rose 2 percent in the year to February, matching the average since the expansion started in June 2009.
Some measures of slack on Yellen’s labor-market dashboard still haven’t returned to pre-recession strength. A gauge of underemployment, which includes those working part-time who would take a full-time position if one were available, improved in February to 11 percent. That compares with 8.8 percent in December 2007, when the last recession began.
The share of jobless who have been out of work for 27 weeks or longer is at 31.1 percent, almost twice as high as at the start of the last downturn.
Reggie Rounds of St. Louis is among those less upbeat about the employment outlook. The 57-year-old is a former Army food-service specialist and beer-delivery truck driver with a bachelor’s degree in sociology. He returned to school in 2012 to earn certificates in green building technology.
Rounds has been out of work since November, when funding ran out for his job at Missourians Organizing for Reform and Empowerment, an organization advocating for low- and moderate-income people. He’s been shoveling snow and picking up other odd jobs to make ends meet.
“Bills are due and there’s not much money to pay them,” Rounds said in a phone interview. He said he feels “kind of lost” since his training has over-qualified him for jobs, while others are demanding “previous experience” that he’s yet to attain.
About 1.8 people are vying for every opening, matching the ratio at the time the last recession began in December 2007, according to calculations by Bloomberg based on the data.
The figures also showed dismissals, which exclude retirements and people who quit voluntarily, fell to 1.67 million from 1.73 million in December.
In the year that ended in January, employers added a net 3.1 million jobs, representing 59.1 million hires and 56 million separations.