US job openings hit four-year high

August 7, 2012 6:06 pm

US job openings hit four-year high

By Robin Harding in Washington

Job openings in the US hit their highest level since the summer of 2008 in further evidence that the labour market continues to heal.

According to new data from the Bureau of Labour Statistics, there were 3.76m vacant jobs in June, the highest level since before the bankruptcy of Lehman Brothers in September 2008.

The data further complicate the picture on the labour market, where job growth has slowed since the start of the year, but some fundamentals seem to be getting better. Non-farm payrolls rose by 163,000 jobs in July.

The US Federal Reserve has shown a strong bias towards easing policy further in order to support economic growth, but a flow of improving data from the labour market could yet affect its decision, because it will not want to reverse any move quickly.

“Recent JOLTS reports have been more in line with a softening labour market recovery than an outright contraction, and we expect that non-farm payrolls will increase by an average of about 170k in the second half of 2012,” noted analysts at Barclays Capital in New York.

The job openings rate in the private sector, which measures the percentage of vacant to total jobs, also rose to its highest level since early 2008 at 3 per cent. That compares with lows below 2 per cent during the recession and a peak of 3.6 per cent during the strong labour market of 2007.

Job openings and turnover provide more detailed measures of “tightness” in the labour market and how easy or difficult it is to find a job.

Total hiring fell by 96,000 compared with the previous month while total separations – which includes workers who were fired or quit – fell by 185,000.

Hiring in the construction sector was relatively strong, with the 447,000 hires in the industry compared with 314,000 separations. That is an encouraging sign for future payrolls reports because construction has been a drag on total employment for the last five years.

There have been some recent signs that the housing sector is bottoming out with slower declines in home prices and more activity. Foreclosures have led to a boom in demand for rental housing, but there has not been much supply in the last five years. That has prompted new construction in some cities.

Improving credit conditions may also boost construction if developers can obtain the finance that they need to build.