WHAT’S BEING CLAIMED:
- A record high in U.S. job openings was seen last March, suggesting a recent hiring slowdown, as employers find it difficult to come across qualified workers.
- The monthly Job Openings and Labor Turnover Survey (JOLTS) released on Tuesday showed that more workers voluntarily quit their jobs last March.
- Economists believe that this confidence in the labor market will increase this year’s wage growth.
The Job Openings and Labor Turnover Survey report strengthens expectations that inflation will accelerate, causing the Federal Reserve to raise interest rates at least twice more this year. The U.S. central bank has already increased interest rates last March.
The chief economist of MUFG in New York, Chris Rupkey, explained, “central bankers need to continue to take the punch bowl away because higher wages and greater inflation are on the way.”
Job openings in March increased by 472,000 to a seasonally adjusted 6.6 million – the highest since December 2000.
Even though the job openings rate was at an all-time high at 4.2 percent, hiring still fell from 5.5 million to 5.4 million in February, suggesting a skills mismatch. Job growth also slowed in March and April.
An NFIB survey on Tuesday confirms the skills mismatch and lack of qualified workers as “the single most important problem” for small businesses in April.
Joel Naroff, the chief economist at Naroff Economic Advisors in Holland, Pennsylvania, said, “Businesses are looking for workers in just about every nook and cranny of the economy.”
A total of 112,000 vacancies were added in the professional and business sector alone. Meanwhile, there are 37,000 vacancies in the transportation, warehousing, and utilities sector, and 68,000 vacancies in the construction industry.
The job openings were concentrated in the Northeast and Midwest regions last March, where there was 1 unemployed worker per job opening. The unemployment rate also fell to 3.9% in April.
The number of Americans who voluntarily quit their jobs rose from 3.2 million in February to about 3.3 million in March.
Economists and policymakers view the quits rate, which rose to 2.3%, as a sign of job market confidence. Last March, quits accounted for a record 62% of separations. They made up just a third at the depths of the recession.
Sarah House, senior economist at Wells Fargo Securities in Charlotte, North Carolina, explained, “Quits are also a source of upward pressure on wages. The majority of workers who voluntarily change jobs receive a pay bump, generating stronger wage growth for job switchers.”
While wage growth as average hourly earnings has remained moderate in its 2.6% increase year-on-year, other measures of wage growth have been more robust.
One of the better measures of labor market slack, the Employment Cost Index, showed wage growth at its fastest pace in 11 years in the first quarter.
Layoffs also fell by 56,000 to 1.56 million last March.