Record high U.S. job openings point to skills shortage

WASHINGTON, Sept 9 (Reuters) - U.S. job openings surged to a record high in July, but a slightly slower pace of hiring suggested employers were having trouble finding qualified workers, a trend that could eventually boost wages.

Job openings, a measure of labor demand, increased 430,000 to a seasonally adjusted 5.8 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey on Wednesday.

That was the highest level since the series started in December 2000 and pushed the jobs openings rate to 3.9 percent in July after holding steady at 3.6 percent for three straight months. Hiring, however, dipped to 5.0 million in July from 5.2 million the prior month. The hiring rate slipped to 3.5 percent from 3.7 percent in June.

“The data now signal unambiguously that the labor market is unable to supply the people companies need. Usually, that means wages will accelerate, though the evidence for that now is mixed,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics in New York.

The so-called JOLTS report could attract the attention of Federal Reserve officials at their policy meeting next week.

Economists are divided on whether the U.S. central bank will raise its benchmark overnight interest rate at the Sept. 16-17 meeting. While the labor market is rapidly tightening, that has not triggered strong wage growth, leaving inflation running well below the Fed’s 2 percent target.

The Fed, whose decision is also complicated by slowing global growth, especially in China and other major emerging markets, has not raised interest rates since mid-2006.

“If these data don’t jolt the Fed into action, nothing will. The Fed has met one-half of their mandate already,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

The tightness of the labor market was underscored by a sharp drop in the number of unemployed job seekers per open job to a record low ratio of 1.44 from 1.56 in June.

“Combining these data with figures from the Labor Department’s employment report suggests that labor market slack continues to diminish,” said Jesse Hurwitz, an economist at Barclays in New York. “On balance, the data suggest labor demand held up solidly at the beginning of the third quarter.”

The JOLTS report also showed a slower pace of layoffs in July, with the layoffs and discharges rate falling to 1.1 percent from 1.3 percent. But the quit rate, which the Fed looks at as a measure of confidence in the jobs market, was unchanged at 1.9 percent for the fourth straight month.

Job openings were concentrated in professional and business services, accommodation and food services, retail trade and nondurable goods manufacturing. (Reporting By Lucia Mutikani; Editing by David Gregorio)