US job openings tick up to fresh record high in April

Services firms grew at faster pace in May

WASHINGTON, June 5, (Agencies): US businesses posted the most job openings on record in April for the second straight month, underscoring the economy’s strong demand for workers.

The number of available jobs rose 1 percent to 6.7 million from 6.6 million in March, the Labor Department said Tuesday. That’s the most since records began in December 2000.

Steady economic growth has encouraged employers to step up hiring. That pushed the unemployment rate in May to an 18-year low of 3.8 percent. Faster consumer spending is expected to lift economic growth above a 3 percent annual pace in the April-June quarter, after growth lagged a bit in the first three months of the year.

There are now more open jobs than there are unemployed people, a historically unusual development that should give workers more leverage to demand raises. At the peak of the recession, there were, on average, 6.7 unemployed people for each job. Now, that figure has fallen to just 0.95 per opening.

Yet wage gains remain sluggish, compared to previous periods when the unemployment rate was this low. Hourly pay rose 2.8 percent in May for all workers, excluding managers, compared with a year earlier. In April 2000, the last time the unemployment rate was at 3.8 percent, hourly pay was up nearly 4 percent. That suggests employers may not be as desperate to hire as the robust number of job openings suggests.

For example, data from the Federal Reserve Bank of Atlanta indicate that workers who switch jobs are starting to get healthier pay gains. That is a sign that companies are willing to pay more to lure workers from other companies.

But by historical standards, pay increases for job-switchers are relatively low. In April, job-switchers saw their wages rise 4 percent, on average. But in December 2000, near the peak of the late 1990s boom, they were getting raises of 6.5 percent.

And Martha Gimbel, director of economic research at job listing site Indeed, points out that pay increases for Americans who remain in their jobs are actually falling. Wages for job-stayers were up just 2.9 percent in April, compared with 3.7 percent six months earlier.

Separate research from the Federal Reserve Bank of Kansas City, released last month, shows that 14.5 percent of people who remained in their jobs in early 2018 received no pay increase from a year earlier. That figure was just 11 percent before the Great Recession began in late 2007.

Steel coils lay in a yard at ArcelorMittal Dofasco steel plant on June 4, in Hamilton, Canada. US President Donald Trump recently announced tarriffs on Canadian steel and aluminum imports. Canadian Prime Minister Justin

Trudeau quickly condemned the new policy as ‘insulting’. (AFP)

Recovery

“That is really astonishing to me at this point in the recovery,” Gimbel said. “That just signals that employers are not worried about their employees being poached.”

The number of people quitting their jobs in April slipped just 1 percent from a record high in March to 3.4 million. More quitting is a positive sign, because it suggests workers are leaving jobs for new, possibly higher-paying, ones.

Job openings rose in professional and business services, which includes accountants, architects and engineers; manufacturing; and in hotels and restaurants.

Meanwhile, expansion in the US services sector, a key driver of the world’s largest economy, gathered pace in May on strong demand, reversing three months of declines, according to an industry survey released Tuesday. However the services industries reported a sharp jump in order backlogs due to shortages of labor and transportation, according to the Institute for Supply Management.

Mounting metal prices and worries about trade tariffs also are causing concerns and supply interruptions, ISM said.

The institute said its non-manufacturing index showed the sector expanded for the 100th month in a row, rising to 58.6 percent, 1.8 percent higher April and overshooting analyst expectations.

The increase reversed the slower growth rates seen in the prior three months. Any score above 50 percent marks expansion. Business activity rose 2.2 points to 61.3 percent while new orders edged a half point higher to 60.5 percent, and the employment index also rose a half point to 54.1 percent, consistent with May’s robust job growth.