Job openings in the U.S. dropped for a second straight month in August, indicating employment gains may be limited by the end of the year.
The number of positions waiting to be filled fell by 32,000 to 3.561 million from a revised 3.593 million the prior month that was less than previously estimated, the Labor Department said today in a statement. Hiring increased at the same time firings rose to a three-month high.
Companies cutting back in the face of slowing global economies and the looming so-called U.S. fiscal cliff of automatic tax increases and government cutbacks may be hesitant to add many workers. At the same time, a Labor Department report last week showed the unemployment rate fell below 8 percent for the first time in more than three years, indicating some improvement in the labor market.
“Firms just aren’t all that enthusiastic about hiring,” Michael Carey, chief economist for North America at Credit Agricole CIB in New York, said before the report. “They’re very prudent at the moment. The uncertainty about global growth and growth in the U.S. is causing people to pull back and wait. I don’t expect that to lift in the next month or two.”
Today’s report helps illuminate the dynamics behind the government’s monthly employment figures. In September, the jobless rate fell to 7.8 percent, the lowest level since January 2009, from 8.1 percent the prior month, the Labor Department said Oct. 5. Payrolls rose by 114,000 workers after a 142,000 gain in August. Private employment, which excludes government agencies, rose by 104,000 in September.
The number of people hired in August rose to 4.39 million, pushing up the hiring rate to 3.3 percent from 3.2 percent, according to today’s report.
Job openings increased for workers in construction, professional and business services and retail trade, while manufacturing, accommodation and food services and the education and health services showed declines.
Total firings, which exclude retirements and those who left their job voluntarily, increased to a three-month high of 1.848 million from 1.582 million a month before.
Applied Materials Inc., the largest producer of chipmaking equipment, said last week it plans to eliminate 900 to 1,300 jobs, or 6 percent to 9 percent of its worldwide workforce. Campbell Soup Co., the world’s largest soup maker, said Sept. 27 it plans to close two plants that employ more than 700 in the U.S. as demand declines and productivity improves.
About another 2.14 million people quit their jobs in August, down from 2.163 million in the prior month. In total, the rate of separations climbed to 3.3 percent from 3.1 percent.
In the 12 months ended in August, the economy created a net 1.8 million jobs, representing 51.6 million hires and about 49.8 million separations, today’s report showed.
Taking into account the 12.54 million Americans who were unemployed in August, today’s figures indicate there are about 3.5 people vying for every opening.
James McCoy, a 43-year-old from Waretown, New Jersey, is searching for a new position. Having lost his job last month at a Wawa Inc. convenience store where he worked for more than 16 years, McCoy said he has been looking for opportunities online, attending job fairs and going to restaurants and retailers asking about work.
“It’s been tough,” said McCoy, who attributes the difficulty to steep competition and a dearth of available jobs.
“I’ve put in plenty of applications and gotten plenty of rejections,” he said.
While last month’s drop in unemployment was unexpected -- no economist surveyed by Bloomberg projected the rate would fall below 8 percent -- Federal Reserve policy makers have said they would like to see “sustained improvement” in the labor market. The central bank in September said that it would probably hold its target interest rate near zero until at least mid-2015 to stimulate more hiring. The central bank also began a third round of stimulus, buying $40 billion in mortgage bonds a month.
“We’re looking for ongoing, sustained improvement in the labor market,” Fed Chairman Ben S. Bernanke told reporters following the announcement on Sept. 13. “What we’ve seen in the last six months isn’t it.”
Federal Reserve Bank of Chicago President Charles Evans has called for accommodation as long as unemployment exceeds 7 percent and the inflation outlook remains below 3 percent. On Sept. 20, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the central bank should hold rates near zero until joblessness drops below 5.5 percent and inflation doesn’t exceed 2.25 percent.
Even some of those who have found work recently are wary of opening up their pocketbooks because of a lack of confidence in the economy. Jenna Kozel, 27, just took a job at Lookout Inc., a San Francisco-based smartphone security company, working in marketing and digital media, after being recruited by technology companies from her public relations job. She’s earning more than $100,000 a year, yet doesn’t plan to buy a car or a house anytime soon.
“I always thought, once I got to a certain income bracket, I’d buy one, but I just don’t want to because I’m worried,” she said. “Even though I’m financially stable, that just seems like an expense I don’t need. I just want to keep my expenditures as low as possible.”