Job openings in US surged to record in July

The number of job openings jumped by 430,000, the biggest gain since April 2010, to 5.75 million.
The number of job openings jumped by 430,000, the biggest gain since April 2010, to 5.75 million.PHOTO: BLOOMBERG

WASHINGTON (BLOOMBERG) - Job openings in the U.S. surged to a record in July, a sign employment will keep climbing.

The number of positions waiting to be filled jumped by 430,000, the biggest gain since April 2010, to 5.75 million, a Labor Department report showed Wednesday in Washington.

The July data show employers were optimistic enough about the economic outlook to post more vacancies and compete for a dwindling pool of available workers as the jobless rate held at a seven-year low.

Federal Reserve officials also will have to consider whether market turmoil that began last month will offset labour-market improvement and interrupt plans to raise the benchmark interest rate for the first time since 2006.

"There is a lot of demand for labour, and I think that will continue to push down on the unemployment rate," Aneta Markowska, chief U.S. economist at Societe Generale in New York, said before the report.

"The labour market's getting very close to full employment" and Fed officials are "going to have to do something about it, if not next week, then relatively soon." The median forecast in a Bloomberg survey of economists projected 5.3 million openings in July.

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 other jobs data by a month, Fed Chair Janet Yellen has said she follows the report as a gauge of labour-market tightness and worker confidence.

The report showed job openings climbed at retailers, factories, restaurants and professional-services companies.

About 2.7 million people quit their jobs in July, down from the prior month's 2.74 million. The quits rate, which shows the willingness of workers to leave their jobs, held at 1.9 per cent and compares with a 2 per cent reading when the recession started in December 2007.

The number of people hired declined to 4.98 million, pushing the hiring rate down to 3.5 percent from 3.7 per cent in the previous report. The gauge calculates the number of hires during the month divided by the number who worked or received pay during that period.

Total dismissals, which exclude retirements and those who left their jobs voluntarily, decreased to 1.61 million from 1.78 million in June.

In the 12 months ended in July, the economy created a net 2.7 million jobs, representing 60.6 million hires and 57.8 millions separations.

There are about 1.4 unemployed Americans vying for each opening, compared with about 1.8 when the last recession began in December 2007, the figures show.

The JOLTS data follow a separate Labor Department report last week that showed the jobless rate dropped to 5.1 per cent in August, the lowest since April 2008 and into the range that the Fed has defined as "full employment".

At the same time, payrolls grew by 173,000, less than projected and the smallest increase since March.

The figures offer more evidence for Fed policy makers to consider as they judge whether the labor market is showing the ongoing improvement necessary to merit an interest-rate increase at their Sept. 16-17 gathering. Some policy makers have said financial markets and a weakening Chinese growth outlook muddy the argument for a rate hike this month.