Job openings in the U.S. rose in February to 14-year high

WASHINGTON – Job openings rose in February to the highest level in 14 years, indicating the U.S. labor market remained resilient even as the economy was cooling.

The number of positions waiting to be filled climbed by 168,000 to 5.13 million, the most since January 2001, a report from the Labor Department showed Tuesday. Hiring slowed and fewer Americans quit their jobs.

More job listings and waning dismissals signal companies remained optimistic the U.S. will pick up in coming months and lead to stronger hiring after March data showed the weakest payrolls gain since 2013. The Job Openings and Labor Turnover Survey, or JOLTS, underscores the improvement that Federal Reserve policy makers are monitoring as they consider when to begin raising interest rates.

“Firms are indicating they’re happy to hire,” said Thomas Costerg, an economist at Standard Chartered Bank in New York, who projected 5.07 million openings. “They’re looking through the current softness and seeing some bright times ahead. It bodes well for future payrolls growth.”

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January job openings were revised to 4.97 million. The median forecast in a Bloomberg survey projected 5.01 million openings in February after a previously reported 5 million the month before.

Job openings in construction, retail trade and food services accounted for the biggest gains in available employment, while manufacturing and government agencies showed a decline.

The JOLTS report adds context to monthly payrolls data by measuring dynamics such as resignations, help-wanted ads and the pace of hiring. Though it lags the Labor Department’s other jobs figures by a month, Fed Chair Janet Yellen follows the figures to gauge labor-market tightness and worker confidence.

Quits rate

Some 2.69 million people quit their jobs in February, down from 2.78 million the prior month, which was the highest since April 2008. The quits rate, which shows the willingness of workers to leave their jobs, fell to 1.9 percent from 2 percent, which was the reading when the recession started in December 2007.

“Measures of job turnover, which tend to lead wage acceleration, were disappointing,” Jeremy Schwartz, an economist at Credit Suisse in New York, said in an e-mail to clients. “The rate of job quits declined slightly from its post-crisis highs and has been stagnant for nearly five months.”

The number of people hired fell to 4.92 million from 4.99 million the prior month. The hiring rate held at 3.5 percent. The gauge calculates the number of hires during the month divided by the number who worked or received pay during that period.

Fewer dismissals

Firings were the lowest since November 2013. Dismissals, which exclude retirements and those who left their job voluntarily, decreased to 1.59 million from 1.72 million a month before.

In the 12 months ended in February, the economy created a net 3.2 million jobs, representing 59.3 million hires and 56.1 million separations.

The latest figures indicate there are about 1.7 unemployed people vying for every opening, matching the lowest level since November 2007.

The increase in job openings is giving some Americans the chance to earn more. Sean Sidders, who began late February as a marketing specialist at Two Men And A Truck, said it wasn’t hard to switch from the advertising agency where he’d worked for just over a year. His job at the moving services company pays about 10 percent more, and will bring relief from a two-hour commute.

“There were a lot of jobs out there, but I wanted one where I could be more in charge of what I was doing,” said the 23-year old resident of Pasadena, Calif., where his employer is opening a new office. “It feels good to have this.”

March payrolls

Payrolls climbed by 126,000 in March following a 264,000 gain a month earlier that was smaller than initially reported, the Labor Department reported Friday. The smaller advance broke a yearlong string of monthly gains in employment exceeding 200,000, which was the longest such stretch since 1995. The jobless rate held at a seven-year low of 5.5 percent, while average hourly earnings rose by 0.3 percent from February.

Federal Reserve Bank of New York President William C. Dudley, in a speech Monday, said he’ll be watching “to determine whether the softness in the March labor market report evident on Friday foreshadows a more substantial slowing in the labor market than I currently anticipate.”

First quarter

He said slow first-quarter growth largely reflected temporary conditions, including unusually harsh winter weather.

Some measures of slack on Yellen’s job-market radar are still not back to pre-recession health. A gauge of underemployment, which includes those working part-time who’d take a full-time position if one were available, was 10.9 percent in March and compared with 8.8 percent in December 2007, when the last recession began.

The Fed last month dropped an assurance that it will be “patient” on the timing of tightening, while also reducing its forecasts for the benchmark rate. Yellen said after policy makers’ March meeting that the change in guidance doesn’t mean they will be “impatient” to start raising rates.

Hiring gains together that lead to a pickup in wages will help to accelerate consumer spending, which accounts for almost 70 percent of the economy.

The economy probably cooled in the first quarter, in part due to harsh winter weather. Gross domestic product may have expanded at a 1.5 percent annualized pace, according to the median estimate in a Bloomberg survey of economists, after growing at a 2.2 percent rate in the final quarter of 2014.

Consumer spending

Household consumption barely rose in February as cold weather kept some shoppers away from malls. Recent figures indicate a turnaround. Motor vehicle sales rose in March to a 17.1 million annualized rate, matching the strongest pace since August, Ward’s Automotive Group data show.

A pickup in consumer spending would help make up for weakness in other parts of the economy. Manufacturing expanded in March at the slowest pace in almost two years, restrained by a stronger dollar, weaker foreign demand, a plunge in oil prices and lingering delays in shipments from West Coast ports.

More seasonable weather, high consumer confidence and a healthier housing market may signal a pickup in growth and payroll gains.

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