Job openings in the U.S. dropped in December from a four-year high, a sign employers put expansion plans on hold as lawmakers wrangled over tax and spending programs.
The number of positions waiting to be filled fell by 173,000 to 3.62 million, the fewest since September, from a revised 3.79 million the prior month that was the most since May 2008, the Labor Department said today in a statement. The pace of hiring cooled, and firings were the lowest on record.
The threat of tax increases and government spending cuts that constituted the so-called fiscal cliff raised concern the economy would stumble at the end of 2012. Further progress may continue to be delayed early this year as Congress debates how much to reduce federal outlays.
“The labor market is improving, but certainly not at a robust rate,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. Price is the best forecaster of payroll growth in the past two years, according to data compiled by Bloomberg. “We’re still going to see that relatively modest pace of advancement in the first part of 2013 as businesses wait to see how the adjustments with payroll taxes and spending cuts affect the economy.”
Stocks were little changed as investors watched earnings before President Barack Obama’s State of the Union address. The Standard & Poor’s 500 Index rose 0.1% to 1,518.8 at 12:05 p.m. in New York.
Obama speaks tonight amid fresh concerns about the economy, which shrank at a 0.1% annual rate in the last three months of 2012 after expanding at a 3.1% pace in the previous three months, according to Commerce Department figures issued last month. The jobless rate was 7.9% in January, little changed from the 7.8% when he took office in January 2009.
Parts of the global economy are also struggling. India’s industrial output unexpectedly dropped in December for a second month as demand faltered in an economy expanding at the weakest pace in a decade, other figures showed today.
Today’s U.S. job openings report helps illuminate the dynamics underlying the government’s monthly employment figures. Payrolls increased by a revised 196,000 workers in December and 247,000 the month before, the Labor Department said Feb. 1. Revisions added a total of 127,000 jobs to the count in the last two months of 2012.
Employment then slowed at the start of this year, with payrolls rising by 157,000 last month.