U.S. job openings rise; payroll increases likely

Job openings in the U.S. rose in October for the first time in three months, a sign gains in payrolls will accelerate in early 2011.
The number of positions waiting to be filled increased by 351,000 to 3.36 million, the most since August 2008, the Labor Department said Dec. 7 in Washington. Excluding a drop among government agencies, the 369,000 increase in openings at companies was the biggest in four years.
Combined with declining claims for jobless benefits and surveys showing hiring at manufacturers and service providers is picking up, the report may help ease concern the labor market lost momentum in November. The government reported last week that the world’s largest economy created 39,000 jobs for the month, fewer than the most pessimistic forecast of economists surveyed by Bloomberg News.
The November payrolls report “looks like more of a bump in the road,” said Jonathan Basile, a senior economist at Credit Suisse in New York. Openings are “a positive force for what could eventually happen. It takes time to go from openings to hiring. It’s still going to be a slow process.”
Another report last week showed manufacturers are more optimistic about sales next year and plan to ramp up spending on new equipment, signaling factories will keep leading the recovery.
Purchasing managers at factories anticipate sales will grow 5.6 percent next year and business capital investment will jump 15 percent, the Tempe, Ariz.-based Institute for Supply Management said in its semiannual forecast. Sales and spending will increase at a slower pace among service providers that account for about 90 percent of the economy.
Job openings increased 12 percent in October from a revised 3.01 million in the prior month, the Labor Department report showed. The rate of available positions rose to 2.5 percent from 2.3 percent in September.
Professional and business services, which include accountants, computer-systems experts and temporary-help agencies, had the biggest increases in available employment, followed by education and health care. Openings dropped at construction firms and government agencies. Compared with the 14.8 million Americans who were unemployed in October, last week’s figures indicate there were 4.4 people vying for every opening, up from about 1.8 when the recession began in December 2007. The number of jobless climbed to 15.1 million last month, pushing the unemployment rate up to a seven-month high of 9.8 percent, the Labor Department recently reported.
The Dec. 7 report helps shed light on the dynamics behind the monthly employment figures. Private payrolls, which exclude government positions, rose by 50,000 workers in November, less than the most pessimistic forecast of economists surveyed by Bloomberg News, Labor Department figures showed.
Employers took on 4.2 million workers in October, down 12,000 from the previous month, according to the report. Total firings, which exclude retirements and those who left their jobs voluntarily, dropped to 1.72 million from 1.81 million a month before.
In the 12 months ended in October, the economy created a net 700,000 jobs, representing about 50.8 million hires compared with about 50 million separations, the report showed.
Federal Reserve Chairman Ben S. Bernanke has been among those saying the recovery has been too slow, keeping unemployment too high.
“At the rate we’re going, it could be four, five years before we are back to a more normal unemployment rate” of about 5 percent to 6 percent, Bernanke said.
Fed policymakers last month began buying Treasury securities as part of a plan to pump as much as $600 billion into the financial system through June. Should the economy not strengthen by then, the purchase of more bonds than planned is “certainly possible,” Bernanke said.
The economy hasn’t grown to the point where demand can’t be met with current staff at Illinois Tool Works Inc., chief executive officer David Speer said in an interview on Dec. 3.
“I still see us with enough capacity in terms of labor right now to not have to make any significant additions,” he said. &#8226