Job openings rise in July, prior month revised down

WASHINGTON (Reuters) - U.S. job openings increased in July, government data showed on Wednesday, but optimism was tempered by downward revisions to the prior month’s numbers.

Job openings, a measure of labor demand, climbed 178,000 to a seasonally adjusted 3.04 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey. However, revisions to June’s data showed there were about 73,000 fewer openings than previously reported.

Heidi Shierholz, an economist at the Economic Policy Institute in Washington said that while the data indicated there were 4.8 people for every job opening, an improvement over June’s ratio of 5.1-to-1, the shortage of jobs remained severe.

“The ratio of unemployed workers per job opening is still much higher than at the worst point in the early-2000’s recession, when it peaked at 2.8 unemployed workers per job opening in September of 2003,” said Shierholz.

“For the first half of 2007 before the current downturn began, the ratio averaged 1.5-to-1. July’s value, at 4.8-to-1, was over three times that high.”

The weak labor market is undermining the economy’s recovery from its longest and deepest recession since the Great Depression. Uncertainty over the economy is holding back businesses from hiring new workers on a large scale, keeping the unemployment rate near 10 percent.

In July, the job openings rate -- a gauge of how many jobs were still open at the end of the month -- rose to 2.3 percent from 2.1 percent in June.

Although layoffs fell 21,000 to 2.12 million the month, the layoff and discharge rate remained at a seven-month high of 1.6 percent. After tapering off early this year, layoffs picked up between April and July.

“The increase in layoffs from April to July was the largest three-month increase in layoffs since early 2009. Furthermore, private sector hires have also stalled,” said Shierholz.

“The combination of layoffs rising and hiring stalling out will severely dampen net employment gains.”

However, private hiring is showing signs of picking up. Private payrolls increased by a better-than-expected 67,000 in August and July’s figures were revised to show 36,000 more jobs added than previously reported, the government said last week.