SHAFAQNA – Job openings climbed in November to the highest level in almost 14 years as the strengthening U.S. economy fueled demand for labor.
The number of positions waiting to be filled rose by 142,000 to 4.97 million in November, the most since January 2001, a report from the Labor Department showed today. The pace of hiring cooled and fewer Americans quit their jobs.
Gains in hiring, waning dismissals and rising confidence underscore a vibrant labor market that in 2014 marked its strongest performance since 1999. Today’s data, among the gauges watched by Federal Reserve Chair Janet Yellen, will help policy makers assess the progress on employment and growth as they consider when to begin raising interest rates.
“The labor market is in fine shape,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who projected job openings would climb in November. “There is an increase in openings. Confidence is rising,” as reflected in consumer surveys, he said.
The median forecast in a Bloomberg survey of nine economists projected 4.85 million openings in November. The October reading was 4.83 million.
The Job Openings and Labor Turnover Survey, or JOLTS, adds context to monthly payrolls data by measuring dynamics such as resignations, help-wanted ads and the pace of hiring. Although it lags the Labor Department’s other jobs figures by a month, Yellen follows the report as a measure of labor-market tightness and worker confidence.
The number of openings, quits and hires are on Yellen’s radar. That shows only three of the monthly indicators that she flagged are back to where they were in the four years leading up to the last economic downturn, according to calculations by Bloomberg.
The employment outlook is brightening as the U.S. continues to grow, reinforcing its role as the world’s standout performer while overseas markets struggle. Payrolls expanded by 252,000 workers in December following a 353,000 gain in November, Labor Department figures showed on Jan. 9. The jobless rate fell to 5.6 percent, the lowest since June 2008. About 3 million more Americans found work in 2014, the most in 15 years.
In today’s report, job openings at professional and business services, retailers and state and local government agencies showed the biggest jumps in November. Leisure and hospitality and health-care firms cut back.
The number of people hired declined to 4.99 million in November from a seven-year high of 5.1 million the prior month. That pushed down the hiring rate to 3.6 percent from 3.7 percent. The gauge calculates the number of hires during the month divided by the number of employees who worked or received pay during that period.
Some 2.62 million people quit their jobs in November, down from the prior month’s 2.71 million. The change wasn’t large enough to affect the quits rate, showing the willingness of workers to leave their jobs, which held at 1.9 percent. It compares with a 2 percent reading when the recession started in December 2007.
Total dismissals, which exclude retirements and those who left their job voluntarily, decreased to 1.61 million from 1.76 million a month before.
In the 12 months ended in November, the economy created a net 2.7 million jobs, representing 57.6 million hires and 54.9 million separations.
Unemployed per Opening
Today’s figures indicate there are 1.8 unemployed people vying for every opening, about the same as when the last recession began.
Sustained gains in hiring are needed to accelerate wage growth and spur consumer spending, which accounts for almost 70 percent of the economy. The December payrolls report showed average hourly earnings dropped from the prior month by 0.2 percent, the biggest since comparable records began in 2006.
The Fed should take a “cautious and conservative” approach as it moves toward starting to raise interest rates around the middle of this year, Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday in a speech.
“The momentum evident in the second half of 2014 will carry over into 2015, and the ongoing outlook will remain solid,” he said.