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 Job openings, a measure of labor demand, increased 299,000 to a
seasonally adjusted 4.17 million, the Labor Department said in its
monthly Job Openings and Labor Turnover Survey on Tuesday. That was
the highest level since January 2008.
Hiring advanced 1.6 percent and layoffs tumbled 4.9 percent. Even
more encouraging, more people are quitting their jobs, a sign of
confidence in the labor market.
"The report is upbeat and dovetails with the improved February and
March payroll data," said Ray Stone, an economist at Stone &
McCarthy Research Associates in Princeton, New Jersey. "The
improvement in job openings foreshadows somewhat faster payroll
growth in the months immediately ahead."
Job growth averaged about 195,000 per month in February and March,
with the unemployment rate holding at near a five year low of 6.7
percent over that period.
The report is one of the indicators being closely watched by Federal
Reserve Chair Janet Yellen and other policymakers at the U.S.
central bank to gauge the health of the jobs market.
With job openings rising and unemployment trending lower, the number
of unemployed job seekers per open job tumbled to 2.50 in February,
the lowest level since July 2008. This ratio was at 2.64 in January.
"This is almost exactly the average seen from 2002 to 2004, a period
over which the unemployment rate averaged 5.8 percent," said Cooper
Howes, an economist at Barclays in New York.
"This suggests that there is little slack remaining in labor markets
and that future wage growth will be stronger than it was at similar
levels of the unemployment rate during past cycles."
There is growing concern among economists that the Fed might be
overstating the slack in the labor market, with measures such as the
short-term unemployment rate having fallen sharply and the decline
in the labor force being more structural in nature.
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As such, the central bank might be too slow to start raising
benchmark interest rates, which it slashed to a record low of zero
to 0.25 percent in December 2008 as it battled the worst recession
since the 1930s, they say.
According to Stone, an analysis of the relationship between job
openings and the unemployment rate, the so-called Beveridge Curve,
suggested an increase in structural unemployment.
The evidence of a skills mismatch, in which job seekers do not have
the right skills for the positions available, could mean the Fed's
expectation that the unemployment rate could be pushed down to
between 5.2 and 5.6 percent without sparking a inflationary rise in
wages is too low.
"It may be that with the 6.7 percent unemployment rate that we had
in both February and March we are closer to their long-run objective
than they think they are," said Stone. "The employment gap may be
closed sooner than if the unemployment rate has to drop to 5.6
percent."
In February, job openings increased in professional and business
services and trade, transportation, and utilities. Hiring was led by
strong gains in business and professional services, construction and
education and health services.
(Reporting by Lucia Mutikani; editing by Meredith Mazzilli)
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