The Increase in Job Openings in US Reached to 13 Year High

The government statistics report published on Tuesday shows the number of job openings posted in the month of June is the highest since February 2001. The report is the Job Openings and Labor Turnover report and it was published by The US Bureau of Labor Statistics.

The report shows the number of vacant jobs in June 2014 was 4.67 million, which was up 2.1% from previous month’s 4.58 million. Like vacancy, hiring also spiked in June to 4.83 million, up 1.8% from the number of hiring in the month of May. In May it was 4.74 million.

Even though it’s too early to consider this as the sign of US economy gaining confidence, reduction of the number of unemployed job seekers is no doubt a good sign. The number per open job reduced to 2.02 in June, lowest since April 2008 and below the average from 2002 to 2006. In May it was 2.14.

An economist called Jacob Oubina said, “It reflects a jobs backdrop that continues to tighten on the supply side. There is not enough qualified supply out there to fill the job openings that exists.” Analysts may not be considering it as a go ahead for the prospects of employment but the economy altogether seems to climb up the ladder gradually.

The Job Openings and Labor Turnover Survey (JOLTS) report indicates the growth potential of the economy and it is being monitored by key US decision makers. The policymakers have should be bullish because the JOLTS report shows 1.8% employees willingly resigned from their jobs in June and only 1.2% was sacked. The separations rate remained 3.3% in June which it was in May.

Another interesting finding is increase in private sector job openings. There has been an increase of 74000 private jobs in June. Jobs in public sector rose by 20000. Analysts are putting more emphasis on the latter because a surge in public sector recruitment implies government is not heading toward budget-cutting. During the post-recession phase, the scenario was completely the opposite.

The Federal Reserve however seems to have a bearish approach. That could be due to slacks in the labor market, long-term unemployment and slow wage growth. Analysts want the Fed to show confidence. A senior economist called Michael Gapen said, “There is little slack remaining in labor markets, and wage growth will pick up more quickly than it did at similar levels of the unemployment rate in past cycles.”

Whether or not The Fed will show confidence is yet to be seen.