WASHINGTON – U.S. employers in June advertised the most monthly job openings in more than 13 years.
Employers posted 4.67 million jobs in June, up 2.1 per cent from May’s total of 4.58 million, the Labor Department reported Tuesday. The number of advertised openings was the highest since February 2001, a positive sign that points to a strengthening economy.
The report “provides further confirmation that the US labour market has indeed shifted to a period of stronger growth,” said Jeremy Schwartz, an analyst at the bank Credit Suisse.
Known as the Job Openings and Labor Turnover survey or JOLTS, the report provides a detailed look at where employment might be heading. It records job postings, overall hiring and the number of workers who either quit or were laid-off. By contrast, the monthly employment report shows the net total of job gains or losses.
Federal Reserve Chair Janet Yellen relies on the JOLTS report as a barometer for economic conditions. The June figures indicate that employers are looking to expand, yet actual hiring has not increased as significantly in recent months.
Roughly the same percentage of Americans quit their jobs in June as they did in May, though the rate has increased over the past year. Quit rates usually rise when employees are finding new and better-paying jobs.
Hiring rose in June to 4.83 million, up from 4.74 million in May. Still, the hiring rate has not risen over the past year as quickly as the number of positions being advertised.
Job openings have increased 17.6 per cent during the past 12 months, while hiring has risen 9.3 per cent during the same period.
This suggests a mismatch in the jobs market.
Some economists interpret the slower pace of hiring as a sign that workers lack the necessary skills. People who previously worked in manufacturing or construction might not have the right background to segue into the health care sector.
The other possibility is that companies are offering low wages that fail to attract the workers they want. If companies offered higher salaries, which could cause more openings to be filled and boost wages, which have barely match inflation since the recession ended more than five years ago.
But the pressure on employers to offer more generous wages could be increasing. On average, there are 2 unemployed workers for every job opening. That’s down from an average of 2.6 unemployed people per opening at the start of the year. As that ratio continues to fall, employers will likely have to boost salaries.