Job openings in the U.S. rose in May as employers grew more optimistic demand will strengthen as the effects of payroll tax increases and federal budget cuts wane.
The number of positions waiting to be filled grew by 28,000 to 3.83 million from a revised 3.8 million the prior month, the Labor Department reported today in Washington. The pace of hiring also increased.
Companies are taking on workers as stronger home and automobile sales signal demand will pick up in the second half of the year. Today’s figures follow data last week showing the economy added more jobs than forecast in June, giving Federal Reserve policy makers room to dial back record bond purchases aimed at spurring hiring and growth.
“This sets the stage for a stronger second-half outlook for consumption,” Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York, said before the report. “The improvement in employment and the improvement in wages suggest aggregate incomes are rising quite nicely.”
Stocks rose for a fourth day amid optimism companies will report better-than-forecast earnings for the second quarter. The Standard & Poor’s 500 Index advanced 0.3% to 1,645.05 at 10:35 a.m. in New York.
Today’s data put the labor market picture in sharper focus after the June employment report, which showed payrolls rose more than forecast and the biggest year-over-year gain in hourly earnings since July 2011.
Payrolls climbed 195,000 for a second straight month, while revisions added 70,000 jobs to the employment count in April and May, the Labor Department reported last week. The unemployment rate held at 7.6%, while hourly earnings in the year ended in June advanced 2.2%.
Another report today showed more small businesses in June said they plan to add workers. The National Federation of Independent Business said its measure of job creation plans was the fourth-highest since 2007. The Washington-based group’s index of small-business optimism eased last month to 93.5 from 94.4 in May.
Today’s Jobs Openings and Labor Turnover Survey, or JOLTS, showed the number of people hired increased to 4.44 million in May, pushing the hiring rate to 3.3% from 3.2%.
Total firings, which exclude retirements and other voluntary departures, were little changed at 1.74 million.