Job openings in U.S. jumped in March to second-highest on record

(Bloomberg) – Job openings climbed in March to the second-highest level on record, a sign the U.S. labor market stayed strong in the first quarter, a report from the Labor Department showed Tuesday.

Key points 

• • Number of positions waiting to be filled rose by 149,000 to 5.76 million, the most since record 5.79 million help-wanted signs went up in July

  • Hiring decreased to 5.29 million from 5.51 million in February

  • Some 2.98 million people quit their jobs, up from 2.98 million, keeping the quits rate at 2.1 percent

  • Dismissals fell to 1.67 million, the fewest since July, from 1.81 million

Big picture

Elevated job listings, along with scant signs of headcount reductions, show employers remained confident last quarter even as U.S. growth slowed. The slump in the pace of hiring could be a sign that as the economy gets closer to full employment, companies have a tougher time finding qualified staff.

The quits rate, a figure Federal Reserve Chair Janet Yellen has highlighted because it’s a barometer that workers believe they’ll be able to find better-paying jobs, has been holding near the highest level of the expansion.

Economists’ takeaways

• “There’s ongoing demand for labor in most sectors,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York. “As the labor market has tightened over the last several years, employers may be finding they need to post more openings to get the desired quantity of employees they want. That’s also the reason why layoffs are low right now.”

• “This report indicates that net job creation was sustained by firms holding onto labor rather than hiring at a faster pace,” John Ryding, chief economist at RDQ Economics in New York, said in a research note. “Meanwhile, the quits rate is now slightly higher than the average for the last expansion,” he said. “This report provides no support to the view that there is more labor-market slack than indicated by the unemployment rate.”

• The rise in job openings “is especially encouraging in the light of the plunge in the stock market in January and early February, which we thought would depress hiring plans for a time,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note after the report.

Other details

• The increase in openings was narrowly based, with the lions’ share coming from companies in professional and business services. Leisure and hospitality companies along with government agencies were also looking to hire. Retailers, financial firms and private education providers were among those with fewer openings. 

• The hiring rate fell to 3.7 percent from 3.8 percent, and has been see-sawing since December.

• In the 12 months through March, the economy created a net 2.8 million jobs, representing 62.4 million hires and 59.6 million separations.

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