story by Alex Kowalski
Job openings increased in May after plunging the prior month, easing concern the U.S. job market was faltering.
The number of positions waiting to be filled climbed by 195,000 to 3.64 million, partially countering the 294,000 drop seen in April, the Labor Department reported Tuesday (July 10). Another report showed confidence among small companies slumped in June.
Increasing demand for workers indicates some companies see an opportunity to expand as sales improve. At the same time, the report showed firings also picked up, indicating the European debt crisis and slowing growth in emerging markets like China may be prompting some employers to cut back.
“The labor market still looks pretty tenuous,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. The April report “sent some worrying signals that maybe things were in free fall. You have the May report and you can see businesses were turning a bit more cautious, but they weren’t completely pulling back.”
Stocks fell for a fourth day as pessimism about the earnings season grew. The Standard & Poor’s 500 Index dropped 0.8% to 1,341.47 at the close in New York. The yield on the benchmark 10-year Treasury note decreased to 1.5 % from 1.51% late yesterday.
Elsewhere, manufacturing in the U.K. unexpectedly surged in May by the most in a year, reflecting an additional working day after a public holiday was moved to last month. In China, imports rose less than anticipated in June, pushing the trade surplus to a three-year high and adding pressure on the government to support demand as the global economy slows.
Confidence among U.S. small companies dropped in June to its lowest point since October, driven by concern that sales and the economy will deteriorate, another report today showed.
The increase in job openings in May reported by the Labor Department was broad-based, led by manufacturers and state and local government agencies, according to today’s report. Only employers in the arts and entertainment industry had fewer jobs available.
Employment climbed by 148,000 to 4.36 million in May, pushing the hiring rate up to 3.3% from 3.2% the prior month. Professional and business services, which include temporary-help agencies, and health-care providers saw the biggest increases in staffing.
Total firings, which exclude retirements and those who left their jobs voluntarily, increased to 1.89 million in May, the most since July 2010, from 1.74 million a month before, today’s report showed.
About another 2.12 million people quit their jobs in May, little changed from 2.11 million the prior month. That pushed the total separations rate to 3.3%, the highest since June 2010.
“Companies are hiring the minimum number of people needed to do the additional work that needs to be done,” said Carl Camden, president and CEO at staffing provider Kelly Services Inc. “They are not making investments in new products, new ventures, new software beyond what they have to. They are not going to until there is more economic certainty, policy certainty, and the situation in Europe clears up.”
In the 12 months ended in May, the economy created a net 1.8 million jobs, representing 51.1 million hires and about 49.3 million separations, today’s report showed.
Considering the 12.7 million Americans who were unemployed in May, today’s figures indicate there are about 3.5 people vying for every opening, up from about 1.8 when the recession began in December 2007.
The openings report helps illuminate the dynamics behind the monthly employment figures, which were released last week.
Payrolls climbed by 80,000 workers in June, less than forecast in a Bloomberg News survey, after a revised 77,000 gain in May that was larger than initially estimated, the Labor Department said July 6. The jobless rate held at 8.2%.