Record job vacancies signal U.S. can sustain employment gains

WASHINGTON — The good news on the jobs front continued as American employers put out a record number of help-wanted signs in April, signaling gains in hiring can be sustained.
The number of positions waiting to be filled increased by 267,000 to 5.38 million, the most in data back to December 2000, from 5.11 million in March, the Labor Department reported Tuesday in Washington. Openings were widespread among industries, including health care, retailers and providers of professional services.
As vacancies mount and unemployment wanes, employers will be pressured to boost wages to attract the most talented workers. The report contains some of the metrics Federal Reserve Chair Janet Yellen tracks to determine the health of the job market as policy makers discuss when to raise interest rates.
"It's a tight labor market -- it's good for job seekers," said Jeremy Schwartz, an economist at Credit Suisse in New York. "The labor market is continuing to do quite well, and even as we're approaching full employment, payroll growth is not slowing down."
The 267,000 increase in openings for April was the largest since March 2012. Vacancies in health care jumped by 100,000 to 910,000, while retailers sought 543,000 employees, almost 30,000 more than in March.
The Job Openings and Labor Turnover Survey, or JOLTS, adds context to monthly payrolls figures by measuring dynamics such as resignations, help-wanted ads and the pace of hiring. Although it lags the Labor Department's other jobs data by a month, Yellen follows the report as a measure of labor-market tightness and worker confidence.
Some 2.7 million people quit their jobs in April, little changed from March, Tuesday's report showed. The quits rate, which was 2 percent when the recession started at the end of 2007, fell to 1.9 percent in April from 2 percent in March.
"The measures of the strong economy are pointing in the same direction," Labor Secretary Tom Perez said in a June 5 phone interview. "People don't quit unless they think they're going to get a better job."
The hiring rate -- the number of people who got new jobs divided by the number who worked or were paid -- fell to 3.5 percent in April from 3.6 percent. Hires decreased to 5.01 million from 5.09 million, according to Tuesday's figures.
The report follows figures last week that showed employers added 280,000 workers to payrolls in May, more than forecast, and the unemployment rate edged up to 5.5 percent from 5.4 percent as more Americans entered the workforce.
In another sign of a tightening job market, the number of workers saying they are so discouraged by job prospects that they've given up looking dropped by 193,000 in May to 563,000, the fewest since October 2008, according to last week's report from the Labor Department.
Another report Monday showed other parts of the economy were emerging from a first-quarter slump. Sales by wholesalers climbed 1.6 percent in April from the prior month, the biggest gain since March 2014. Distributors also boosted inventories by 0.4 percent, more than forecast, indicating stockpiling for better times will contribute to economic growth this quarter.
The April job postings data showed the employment picture has remained resilient after the strongest year for job gains since 1999, even as other parts of the economy suffered under a stronger dollar, West Coast port labor disruptions and severe weather in the first quarter. Monthly job gains have averaged 217,400 so far this year after an average 259,670 in 2014.
Wage growth has been slower to materialize in this expansion. Average hourly earnings showed more signs of life in May, with the year-over-year increase in wages climbing to 2.3 percent for the highest since August 2013. A separate Labor Department measure of paychecks, the Employment Cost Index, rose in the first quarter by the most since the end of 2008.
Employers including Dublin, California-based Ross Stores Inc. are seeing faster pay increases on the horizon.
"We expect wage rates are going to move up over the next few years," Chief Financial Officer Michael Hartshorn said in a May 21 earnings call. Even as labor costs rise, "there is a silver lining here in that the customer has more money in their pocket because of higher wage rates that could well help our top line as well."
About 1.6 people are vying for every opening, compared with about 1.8 when the last recession began in December 2007, according to Tuesday's report.
In the year that ended in April, employers added a net 2.8 million jobs, representing 60 million hires and 57.2 million separations.