Job Openings in U.S. Rose in June to Four-Year High: Economy
Job openings in the U.S. rose in June to the highest level in four years, indicating employment gains may accelerate in the second half of the year.
The number of positions waiting to be filled climbed by 105,000 to 3.76 million, the most since July 2008, from a revised 3.66 million the prior month, the Labor Department said today in Washington. Hiring and firings cooled.
A rising need for workers shows some employers are expanding as sales improve, laying the ground for a pickup in hiring that may help boost consumer spending, which accounts for about 70 percent of the economy. Payrolls rose more than forecast in July even as the unemployment rate climbed to a five-month high, the Labor Department reported last week.
“The economy is still growing, that’s underpinning labor demand,” said Henry Mo, a senior economist at Credit Suisse in New York. “Job availability is increasing, but we still need to see employers put this into action. The economy will grow a little better in the second half than in the first half and the labor market will improve gradually.”
Stocks advanced, sending the Standard & Poor’s 500 Index higher for a third straight day, amid better-than-estimated corporate earnings and speculation global central banks will take steps to boost economic growth. The S&P 500 Index rose 0.7 percent to 1,403.41 at 11:00 a.m. in New York.
Elsewhere, the Swiss central bank’s foreign-currency reserves surged to a record in July as the euro region’s increasing turmoil forced policy makers to step up efforts to defend their ceiling on the franc.
Today’s U.S. jobs opening report helps shed light on the dynamics behind the monthly employment figures.
Payrolls rose by 163,000 in July after a 64,000 gain in June, the Labor Department said on Aug. 3. The median estimate of economists in a Bloomberg survey called for a 100,000 advance. Private payrolls, which exclude government agencies, rose 172,000, also exceeding the median forecast.
The number of people added to headcounts declined to 4.36 million in June from the previous month, pushing the hiring rate down to 3.3 percent from 3.4 percent, today’s report showed.
The increase in job openings was led by leisure and hospitality, including hotels and restaurants. Openings at health services and manufacturers also increased.
Americans who recently found work include Hilary duPont, a 22-year-old who graduated from Duke University in May. She just got an offer to work in the New York communications department of Chobani Inc., a maker of Greek-style yogurt, after three months of searching.
“It was discouraging because I felt like everyone around me had a job,” said duPont, who applied for more than 20 positions. “You have to be persistent and repeatedly e-mail people, but not be annoying. It’s a fine line, and it’s frustrating.”
Including the July gain in payrolls, the U.S. has recovered 4 million of the 8.8 million jobs lost as a result of the 18- month recession that ended in June 2009.
Jobs and the economy are central themes in the presidential election campaign. The July report gave both President Barack Obama and Republican challenger Mitt Romney data to buttress their messages. Obama said the gain in payrolls marks the 29th consecutive month of job growth and shows the U.S. is steadily, if slowly, mending from the recession. Romney focused on the rise in the unemployment rate as a blow to the middle class.
Demand for automobiles has helped some companies to expand. Honda Motor Co. (7267), reliant on U.S. vehicle sales for more than half its profit, said it is investing $40 million at a Greensburg, Indiana, plant that produces the Civic compact and will hire 300 workers later this year.
Total firings, which exclude retirements and those who left their job voluntarily, decreased to 1.81 million from 1.96 million a month before, which was the highest level since July 2010, today’s report showed.
About another 2.11 million people quit their jobs in June, down from 2.18 million in the prior month. That reduced the total separations rate to 3.2 percent from 3.4 percent in June.
In the 12 months ended in June, the economy created a net 1.8 million jobs, representing 51.3 million hires and about 49.6 million separations, today’s report showed.
Considering the 12.7 million Americans who were unemployed in June, today’s figures indicate there are a little more than three people vying for every opening, up from about 1.8 when the recession began in December 2007.
The payrolls report last week showed the jobless rate climbed to 8.3 percent in July from 8.2 percent. Unemployment has exceeded 8 percent for 42 consecutive months, the longest stretch in monthly records dating to 1948, and is one reason why Federal Reserve policy makers said they are prepared to take new steps if needed to boost the economy.
Fed officials, after meeting last week, left unchanged their statement that economic conditions would likely warrant holding the benchmark interest rate target near zero at least through late 2014. They said unemployment “remains elevated.”
Cisco Systems Inc. (CSCO) is among companies announcing job cuts. The biggest maker of computer-networking equipment plans to eliminate about 1,300 jobs, or 2 percent of the workforce, as Europe’s debt crisis and sluggish corporate spending threaten sales.
Financial firms trimming jobs include Morgan Stanley (MS), whose headcount will drop by about 700 in the second half, bringing its total 2012 reductions to 4,000. Deutsche Bank AG (DBK) will cut about 1,900 jobs by year-end, mostly outside Germany, and is shrinking compensation and benefits.
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