Company Job Openings Drop for 2nd Straight Month
August 11, 2010Company job openings fell for the second straight month in June, a sign that hiring isn't likely to pick up in the coming months.
The data comes after a weak employment report Friday that showed businesses aren't adding enough new workers to bring down the unemployment rate, currently 9.5 percent.
Wednesday's report, known as the Job Openings and Labor Turnover survey, or JOLTS, suggests that won't change anytime soon.
Job openings on average can take about three months to fill, economists say. That means the JOLTS report for June provides a rough signal of how many jobs will be created about three months later.
The Labor Department says job openings at businesses fell to 2.54 million in June from 2.6 million in May. Overall openings were unchanged, as government openings ticked up. The government figures have been distorted in recent months by the ending of hundreds of thousands of temporary census jobs.
June's total openings are 26 percent above the low point of 2.3 million in July 2009. But that's still far below pre-recession levels of about 4.4 million openings per month.
The report suggests that slow hiring is the biggest hurdle facing the nation's work force. Layoffs by private companies fell to just below 1.7 million, similar to the pace before the recession. Private sector layoffs rose to a peak of 2.5 million in January 2009.
"It is disappointing that one year into the recovery, the number of private job openings is still lower than that reported during the 2001 recession," Henry Mo, an economist at Credit Suisse, wrote in a note to clients.
During the 2001 recession, job openings averaged nearly 3.8 million per month, about 28 percent higher than current levels.
The recession that began in December 2007 hasn't officially been declared over, but most economists believe the recovery began in July 2009.
Wednesday's report also illustrates how much competition there is for those jobs that are available. There are currently 5 unemployed workers, on average, for each available job. That compares with about 1.8 per opening when the recession began.
The government said Friday the nation lost a net total of 131,000 jobs in July. Excluding the impact of the loss of 143,000 census jobs, the economy added a meager 12,000 positions, as layoffs by state and local governments almost canceled out weak hiring by private employers.
The Federal Reserve, meanwhile, downgraded its assessment of the economy Tuesday. The central bank said "employers remain reluctant to add to payrolls" and the "pace of economic recovery is likely to be more modest ... than had been anticipated."
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