U.S. employers posted a record number of open jobs in June, a sign that the solid hiring of recent months will likely continue.
Job openings jumped eight per cent to 6.2 million, the highest on records dating back to 2000, the Labour Department said Tuesday. Hiring fell, however, and the number of people quitting their jobs also dropped.
The data suggest that employers have plenty of jobs to fill but are struggling to find the qualified workers they need. Typically, employers would offer higher pay to entice more applicants, accelerating wage growth. But the government’s jobs report for July, released Friday, showed that pay gains haven’t picked up yet.
Job openings in construction and manufacturing rose sharply. They also increased in financial services, health care, and in state and local government. The number of open jobs in retail fell.
The report comes after the government said Friday that employers added 209,000 jobs in July and revised its June figure higher to 231,000. Friday’s figures represent a net total of jobs added minus jobs lost, while Tuesday’s report includes overall hiring data.
Tuesday’s data come from the Job Openings and Labour Turnover survey, or JOLTS. They are more detailed and provide a fuller view of the job market than the monthly jobs figures.
The JOLTS suggests that the economy is at or near “full employment,” when nearly everyone who wants a job has one and the unemployment rate mostly reflects the temporary churn of job losses and gains.
Potential inflation spur
If so, that has implications for the Federal Reserve: Businesses would be forced to lift pay and potentially raise their prices to cover the cost of higher salaries if the economy is at full employment.
That could spur inflation. Fed policymakers have been hiking short-term interest rates partly because they mostly think full-employment has been reached.
Yet on Friday, the government’s jobs report showed that many Americans have come off the sidelines and launched job hunts in the past year, and most have found jobs. These newly-employed workers weren’t actively looking for jobs in previous months and so weren’t counted as unemployed.
That is a sign that more Americans are willing to work than the unemployment rate suggests, and indicates the economy isn’t at full employment yet.