WASHINGTON – It turns out we may be able to breathe a little easier about the slowdown in hiring last month.
A Labor Department report Tuesday showed that job openings surged 3.4 per cent to 5.1 million in February — a 14-year high. That’s a clear sign that companies are willing to boost their staffs.
The figure follows a disappointing jobs report on Friday, which showed that employers added only 126,000 jobs in March. That was the weakest number in 15 months, and followed 12 straight months of job gains above 200,000.
The pickup in open jobs, however, suggests that hiring could rebound in the coming months. Businesses have been slow to fill openings for much of the recovery and may start filling more of their open jobs in April.
The sharp rise in available jobs “is a reassuring sign that the fundamentals of the labour market have continued to improve,” said Jeremy Schwartz, an analyst at Credit Suisse.
Other recent data point to better hiring and growth in the second quarter. The number of people seeking unemployment benefits fell last week. And a survey of service firms, including retailers, banks and construction companies, found that they expanded at a healthy pace last month.
There were some negative signs in Tuesday’s report. Total hiring slipped 1.6 per cent in February to 4.9 million, the second straight decline.
But layoffs fell even more. The declines in hiring and layoffs suggest that employers were cautious in the face of a faltering economy but weren’t spooked enough to cut jobs.
Recent data has pointed to sputtering growth in the first three months of this year. Consumers have been reluctant to ramp up spending, instead saving much of the windfall from cheaper gas prices. Fewer exports have lowered factory output. Home construction has also been weak.
Many economists blamed the tepid job gain on temporary factors, such as harsh winter weather, a labour dispute at West Coast ports that disrupted shipping, and a stronger dollar that has hurt U.S. export sales. Most now expect the economy expanded at only a 1 per cent annual rate in the first three months of this year, down from 2.2 per cent in the final three months of last year.
The increase in available jobs, even as hiring slows, could also be a sign that employers will have to try harder to fill their jobs. Businesses may be forced to offer higher pay to attract more workers.
There are some indications that may already be happening. Retailers had nearly 30,000 more open jobs in February than the previous month, while hotels and restaurants posted 37,000 more jobs. Yet neither sector filled all those positions: Retail hiring fell in February compared to the previous month, while hotel and restaurant hiring rose by a smaller amount than openings.
Many companies in those sectors have announced high-profile wage increases in recent months, including Wal-Mart, McDonald’s, Ikea, and TJX Cos., the parent of discount store operator TJ Maxx and Marshall’s.
Average hourly earnings rose 0.3 per cent in March, the government said last week, a sign wages may be perking up. But they are still just 2.1 per cent higher than a year ago, similar to the tepid gains that have occurred since the recession ended in June 2009.
There were other good signs in Tuesday’s report: Layoffs plummeted 7.6 per cent to 1.6 million, the lowest level in 16 months. That points to a high degree of job security for those Americans who are employed.
And the number of people quitting their jobs slipped 3.3 per cent to 2.7 million. That is still 10.2 per cent higher than a year ago. More people quitting can be a good sign for the economy, because people typically quit when they have found another job, usually at higher pay.
The jobs figures reported Friday are a net figure: Jobs gained minus jobs lost. The data reported Tuesday are more detailed. They calculate total hires, as well as quits and layoffs. Tuesday’s numbers also reflect data for February, and are a month behind last week’s jobs report.