Tuesday, July 10, 2012
U.S. employers advertised more jobs in May than April, a hopeful sign after three months of weak hiring.
Job openings rose to a seasonally adjusted 3.6 million, the Labor Department said Tuesday. That's up from 3.4 million in April. It's also the second-highest level in nearly four years, just behind March's 3.7 million.
A rise in openings could mean hiring will pick up in the coming months. It typically takes one to three months to fill a job.
The report "suggests business attitudes toward hiring are not in complete free-fall," Michael Feroli, an economist at JPMorgan Chase, wrote in a note to clients.
Even with the increase, the competition for jobs remains fierce. There were 12.7 million unemployed people in May, or an average of 3.5 unemployed for each open position. That's down from a ratio of 3.7 in April. In a healthy job market, the ratio is usually around 2 to 1.
And more openings have yet to translate into greater hiring.
For the April-June quarter, the economy added an average of only 75,000 net jobs a month, according to the government June employment report released last Friday. That's roughly a third of the average monthly jobs added in the January-March quarter.
Businesses and governments have been slow to fill jobs in the past year.
Since May 2011, openings have increased by more than 18 percent. But gross hiring has risen only about 4 percent.
Openings are more than 50 percent higher than they were in June 2009, when the recession ended. But they are still below pre-recession levels of about 5 million per month.
The government's monthly employment report measures net hiring.
Tuesday's report, known as the Job Openings and Labor Turnover survey, measures gross hiring. That rose in May to 4.36 million, the second-highest level in two years.
But when layoffs, quits and other separations are subtracted, the net gain is close to the 77,000 reported Friday for May.
Layoffs increased in May to the highest level since July 2010.
A weaker job market has also led to smaller pay increases. Wages for those who have jobs are barely keeping up with inflation. Without more jobs and higher pay, consumers won't have the income needed to fuel more spending and economic growth.
The slow pace of hiring also suggests businesses aren't confident enough in the economy to add permanent employees. Nearly a third of the jobs added last month were temporary hires. That is usually seen as a good sign, because it indicates employers need more workers and will soon hire permanently. But many economists now say it suggests that companies are simply reluctant to add workers for the long term.
Overall, the economy isn't growing fast enough to generate more jobs. The economy expanded at a 1.9 percent annual rate in the first three months of the year, down from a 3 percent pace in the final three months of last year. Growth likely didn't pick up much in the April-June quarter, economists say.