Originally Published in BLOOMBERG
Job openings rose in June to the highest level in more than 13 years, firming up the U.S. labor market picture for the second half of the year.
The number of unfilled positions climbed by 94,000 to 4.67 million, the most since February 2001, from a revised 4.58 million in May, a report from the Labor Department showed today.
Today’s figures are among those on Federal Reserve Chair Janet Yellen’s employment “dashboard,” which she uses to help guide monetary policy. The increase in openings, combined with the highest readings on the number of people hired and leaving their jobs since 2008, means the healing in the labor market is broadening, albeit at a measured rate.
“There’s improvement, but it’s still slow and uneven,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. Hiring, firings and quits will need to be closer to pre-recession levels “before Yellen and Co. get concerned that maybe the economy might be overheating.”
Stocks fell after the biggest two-day rally in the Standard & Poor’s 500 Index since April, depressed by a drop in energy shares as the price of crude oil retreated. The S&P 500 declined 0.3 percent to 1,930.79 at 11:16 a.m. in New York.
The Job Openings and Labor Turnover Survey, or JOLTS, contextualizes monthly payrolls figures by measuring dynamics including resignations, help-wanted ads and the pace of hiring.
Although it lags the Labor Department’s other jobs data by a month, Yellen follows the report as a measure of labor-market tightness and worker confidence.
Today’s figures indicate there are about 2 unemployed people vying for each opening. The ratio when the last recession began in December 2007 was 1.8 job seekers per opening.
Payrolls expanded by 209,000 workers in July, following a 298,000 gain the prior month, Labor Department figures showed last week. Gains have exceeded 200,000 for six straight months, the first time that’s happened since 1997.
The improving conditions drew more job seekers into the labor force, pushing up the unemployment rate to 6.2 percent from 6.1 percent.
Two-thirds of Yellen’s dashboard measures are still shy of their pre-recession levels, including the share of jobless Americans who have been out of work for 27 weeks or longer, and the portion of the working-age population in the labor force.
In today’s report, the number of people getting jobs rose to 4.83 million in June, the most since April 2008, from 4.74 million, pushing the hiring rate to 3.5 percent from 3.4 percent. The metric is calculated by dividing the number of monthly hires by the number of employees who worked or received pay during that period. It averaged 2.8 percent during the previous expansion.
Job openings in June increased at factories, retailers and professional and business services. The rate of openings rose to 3.3 percent, the highest since June 2007, from 3.2 percent.
Some 2.53 million people quit their jobs in June, the most since June 2008, up from the prior month’s 2.49 million.
The quits rate, which shows the willingness of workers to leave their jobs and may gauge the degree of optimism in finding a new position, held at 1.8 percent. It read 2.1 percent when the recession started at the end of 2007.
Separations rose to 4.55 million in June from 4.53 million, today’s report showed. Dismissals, which exclude retirements and voluntary departures, decreased to 1.62 million from 1.66 million a month before.
In the 12 months ended in June, the economy generated a net 2.4 million jobs, which included 55.7 million hires and 53.3 million separations.
Hiring gains could catalyze enough income growth to drive up consumer spending, which accounts for almost 70 percent of the economy.
Businesses expanding their talent pools include Union Pacific Corp. (UNP) The largest publicly traded railroad expects to hire a total of 5,000 people in 2014, of which 4,000 are expected to cover attrition. Cognizant Technology Solutions Corp. (CTSH), one of the largest providers of outsourcing services, netted 8,800 new hires in the second quarter, the most since 2011.
The overall progress in the economy and labor market has allowed Fed policy makers to further reduce their bond-buying while keeping interest rates at record lows. The Federal Open Market Committee announced July 30 that it would trim monthly asset purchases by $10 billion, to $25 billion. The central bankers repeated that they’ll probably reduce purchases in “further measured steps,” while keeping interest rates low for a “considerable time.”