Job openings fell in December amid U.S. budget battles

Openings Breakdown

Six of seven major industry categories showed a drop in job openings in December, led by professional and business services, which had a 92,000 decrease in jobs available. Trade and transportation followed as retailers sought less help.

Construction was the only category to show an increase, with job openings rising by 3,000 to 92,000.

The number of workers hired in December dropped to 4.19 million, the fewest in a year, from 4.4 million, pushing the hiring rate down to 3.1% from 3.3%, according to today’s report.

A possible slowdown in consumer spending and government cutbacks threaten to impede further progress in the labor market. Payroll growth in January was the weakest in four months, and households this year will see their paychecks reduced by higher payroll taxes while Congress debates whether to slow the growth of federal outlays.

At the start of the year, Congress allowed the payroll tax that funds Social Security benefits to revert to 6.2% from 4.2% and boosted the levy on top income earners, which may weigh on consumer spending.

Spending Cuts

Lawmakers now have until the end of the month to come up with a way to avert $1.2 trillion in across-the-board spending cuts, known as sequestration, set to take effect on March 1. The Obama administration has begun a public campaign to head off the cuts, which White House officials said will limit education outlays, small business loans, food safety inspections and defense.

Total separations, which include firings and those who leave their jobs voluntarily, decreased to 4.07 million in December from 4.22 million, according to today’s Labor Department report. That drove the separations rate down to 3% from 3.2% in November.

The number of people fired fell to 1.57 million, the least since monthly records began in December 2000.

Also included in total separations were 2.16 million people who quit their jobs in December, down from 2.18 million in the prior month.

In the 12 months ended in December, the economy created a net 1.8 million jobs, representing 51.8 million hires and about 50 million separations, today’s report showed.

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