Job openings in the U.S. climbed to a five-year high in October, indicating employers were confident about demand even as Washington’s budget impasse shuttered parts of the federal government.
The number of positions waiting to be filled rose by 42,000 to 3.925 million, the highest since May 2008, from a revised 3.883 million in September, the Labor Department reported Tuesday in Washington. The pace of hiring decreased.
Gains in the job market could drive wage growth and boost consumer spending, which accounts for almost 70 percent of the economy. Employers added 188,600 workers on average from January through November, up from an average of about 179,500 in the same period last year.
“If we can create some jobs, the incomes that will be restored will be spent on goods and services,” Carl Tannenbaum, chief economist of Northern Trust Corp. in Chicago and a former senior vice president at the Chicago Fed, said before the report. “That will create better revenue and profits for businesses, that’ll generate maybe some additional hiring as they expand to meet the demand, and a virtuous cycle will really start to roll.”
The Labor Department revised the number of openings in September from a previously reported 3.91 million.
The Job Openings and Labor Turnover report is among data monitored by Janet Yellen, the nominee to succeed Fed Chairman Ben Bernanke when his term ends Jan. 31. Yellen is the current Fed vice chairman. Rates of hiring and dismissals combined with the number of people quitting their jobs are among the data Yellen has said she tracks.
Today’s report showed the number of people hired decreased to 4.51 million in October from a 4.63 million. The hiring rate fell to 3.3 percent from 3.4 percent in September. The gauge calculates the number of hires during the month divided by the number of employees who worked or received pay during that period.
The number of total dismissals, which excludes retirements and those who left their job voluntarily, slumped to 1.47 million from 1.76 million in September.
Some 2.385 million people quit their jobs in October, up from 2.327 million the prior month. The quits rate, which shows the willingness of workers to leave their jobs, was little changed from the prior month at 1.7 percent in October, and it was down from a 2.1 percent reading when the recession started almost six years ago.
Job openings increased in professional and business services, construction and manufacturing.
In the 12 months ended October, the economy created a net 2 million jobs, representing 53 million hires and 51 million separations.
Considering the 11.3 million Americans who were unemployed in October, today’s figures indicate there were almost 2.9 people vying for every opening, up from about 1.8 when the last recession began in December 2007.
The Labor Department’s monthly employment report last week showed the job market continued to make progress in November. Payrolls expanded by 203,000 workers last month after a 200,000 gain in October. The jobless rate fell to 7 percent, a five-year low, from 7.3 percent in October.
Private employment, which excludes government agencies, rose 196,000 following a 214,000 gain the prior month.
Doug Neeper, 61, is among those witnessing an improving job market. The Financial Planning and Analysis consultant is a leader at networking group Job Connections in Danville, California, near San Francisco. During the downturn, he said his group’s attendance exploded to more than 300 people per gathering, and things have been gradually improving.
“Our meetings are averaging anywhere between 25 to 50 people, very similar to what I experienced when I joined 10 years ago,” Neeper said.
Transporters are adding jobs as holiday retailing shifts online. E-commerce sales are expected to increase between 13 and 15 percent this holiday season, almost three times the 4 percent projected increase for holiday retail sales, the National Retail Federation said in October, benefitting ground and express carriers.
In November, the transportation and warehousing sector added 30,500 workers, including 8,600 couriers and messengers and 8,400 people in truck transportation. FedEx Corp. was among companies hiring.
“FedEx is increasing hours for existing employees and increasing the workforce with tens of thousands of seasonal positions as needed to maintain outstanding service during the peak holiday season,” the company said in an Oct. 10 news release. “Last year approximately 20,000 seasonal positions were added to the FedEx workforce, and this year we expect seasonal hiring to be higher in response to increasing customer demand.”
Fed officials are gauging the outlook for the labor market as they consider scaling back their $85 billion-a-month bond- buying program, known as quantitative easing. Policy makers meet Dec. 17-18 in Washington to discuss the future of monetary policy.
The share of economists predicting the Fed will begin to reduce purchases in December doubled after last week’s Labor Department report showed back-to-back monthly payroll gains of 200,000 or more for the first time in almost a year.
The Federal Open Market Committee will probably begin tapering this month according to 34 percent of economists surveyed by Bloomberg Dec. 6, an increase from 17 percent in a Nov. 8 survey. The share projecting that central bankers would wait until March to make the first cut declined to 40 percent from 53 percent.