Job openings hit five-month low in April
WASHINGTON (Reuters) - U.S. Job openings dropped to a five-month low in April amid a widespread decline in vacancies in all sectors of the economy, underscoring the recent weakness in the labor market.
Job openings - a measure of labor demand - fell 325,000 to 3.42 million, the lowest level since November, the Labor Department said in its monthly Job Openings and Labor Turnover Survey on Tuesday.
Private sector vacancies dropped 282,000, the most since early 2009, to 3.08 million, while government job openings fell 42,000 to 336,000.
The report helps to explain the abrupt pull-back in job growth in April, which saw employers outside the farm sector adding a paltry 77,000 positions to their payrolls during the month after an increase of 143,000 in March.
"The report was soft, lending some credence to the view that the April-May slowing seen in the payroll report was real and not a statistical fluke," said Michael Feroli, an economist at JPMorgan in New York.
Economists had largely dismissed the step down in payrolls growth as payback for a warm winter that had pulled forward hiring into January and February. But that conviction was tested as employment growth softened further in May, signaling a more fundamental weakness in the economy.
With 12.5 million Americans out of work in April, the drop in vacancies means there are no jobs for more than two out of every three unemployed people.
The decrease in job openings in April was broad based, with manufacturing vacancies falling 62,000 to 246,000 - the lowest since November.
Professional and business services job openings dropped 108,000 to 679,000. Vacancies in the retail sector fell by 42,000 to 322,000.
With the number of unemployed outpacing available jobs, the report somewhat weakens the argument that much of the unemployment problem afflicting the economy is the result of a skills mismatch.
"Unemployed workers far outnumber job openings in every sector," said Heidi Shierholz, an economist at the Economic Policy Institute in Washington.
"This underscores that by far the main cause of today's persistent high unemployment is a broad-based lack of demand for workers and not, as is often claimed, available workers lacking the skills needed for the sectors with job openings."
A study by the Federal Reserve Bank of Chicago published this month found little evidence to support the argument of a skills shortage driving up unemployment.
The job openings report also a showed a 68,000 increase in layoffs. While the level of layoffs is below the 2007 average, the rise in April could shed some light on why weekly jobless claims have remained elevated since the end of that month.
"The problem appears to be not so much a high rate of firing but rather a low rate of hiring," said JPMorgan's Feroli. "The low level of layoffs may also help explain why the jobless claims data did not do a particularly good job of signaling the recent slowing in job growth."
Total hires fell 160,000 in April. Net hiring - hires less separations - were 89,000.
(Editing by Andrea Ricci)