Job openings at 4-year high in June but hiring slows
WASHINGTON (Reuters) - U.S. job openings rose to a four-year high in June, but a slowdown in hiring underscored recent weakness in the labor market that has been blamed on an uncertain economic outlook.
Job openings rose by 105,000 to 3.76 million in June, the highest since July 2008, the Labor Department said on Tuesday in its monthly "Job Openings and Labor Turnover Survey" report. But hires fell by 100,000 from May.
Economists said worries of deep government spending cuts and higher taxes scheduled to kick in at the start of 2013 and Europe's on-going debt crisis were making companies hesitant to take on new workers.
There are fears that politicians in Washington will be unable to avoid the so-called fiscal cliff, in a repeat of last year's debt ceiling debacle, which cost the country its cherished AAA credit rating from Standard and Poor's.
"Hiring actually slowed in June, an indication that firms may be willing to leave some jobs unfilled until the uncertainty of the election and the fiscal cliff are clarified," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "A moderation in terminations supports that conclusion."
Layoffs in June fell by 149,000 to 1.81 million, coming mostly from the government side.
In June, job openings rose almost across the board, with noticeable gains in education and health-care services, and at hotels and restaurants.
The government continued to see a decrease in job openings, mostly reflecting belt-tightening by state and local governments.
On the hiring side, there were increases only in the construction sector and at hotels and restaurants in June.
"This is in line with the solid data we have seen from the housing sector in recent months," said Cooper Howes, an economist at Barclays in New York.
"We expect residential construction will provide a boost to hiring as the housing market recovery continues to outpace that of the labor market as a whole."
Despite the rise in vacancies in June, there are no jobs for more than two out of three unemployed workers, undercutting the argument that much of the unemployment problem afflicting the economy is the result of a skills mismatch.
A study by the Federal Reserve Bank of Chicago published recently found little evidence to support the argument of a skills shortage driving up unemployment.
The job openings report also showed a drop in the number of people voluntarily quitting their jobs.
"If the economy were healthier, we would expect a larger number of voluntary quits, which would signal that workers are more confident about outside job opportunities," said Elise Gould, an economist at the Economic Policy Institute in Washington.
The job openings report also offered hope that the rebound in employment in July would be sustained. After an increase in new jobs in June of only 64,0000 - the third straight month of job gains below 100,000 - employers added 163,000 new jobs to their payrolls last month.
"The lack of follow-through on hiring after a strong couple of months early this year is not entirely due to real economic trends, otherwise we would not be seeing the underlying labor market indicators moving upward," said Naroff.
"These (job openings) data argue that there is no reason to think the job payroll increase posted in July cannot be duplicated in the months to come."
(Editing by James Dalgleish and Leslie Adler)
- Moscow fights back after sanctions; battle rages near Ukraine crash site |
- Carnage at U.N. school as Israel pounds Gaza Strip |
- U.S. economy back on track with strong second-quarter rebound |
- Argentina fails to reach debt agreement, default looms
- Obama to Republicans: ‘Stop just hatin’ all the time’