Hiring Jumps, While Job Openings Edge Up Slightly
May 11, 2010 - 11:47 AMNew hiring rose in March to its highest level in more than a year while job openings moved up slightly, signs the job market is slowly improving.
The Labor Department said Tuesday that employers hired 4.24 million people in March, up from 4 million the previous month. Job openings edged up by 47,000 to 2.69 million.
But new hires and job openings remain well below pre-recession levels, as many employers are still cautious about adding to payrolls.
That is particularly true for small businesses. A separate survey by the National Federation of Independent Business found smaller companies were more optimistic in April about future economic trends than the previous month. But slightly more are still planning to cut jobs than create them, the NFIB said.
The group's small business optimism index rose to 90.6 from 86.8, the highest since September 2008, when Lehman Brothers collapsed and the financial crisis intensified. It was the first time in 18 months that the index topped 90. But the index rarely falls that low, and was below 90 for only one quarter in the steep 1980-82 recession.
"The level of the index is still very depressed," said Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a note to clients. "If the whole economy were small businesses, this survey suggests it would still be contracting at a 3 percent rate."
Economists generally cite two reasons for the divide: Small companies are less likely to export than larger firms and therefore aren't benefiting as much from improving economies in Asia and parts of Latin America.
Smaller companies are also more dependent on bank lending than larger firms, which can issue bonds in order to borrow.
In the government's report, the construction and retail industries reported the largest jumps in hiring, while manufacturing and government also reported gains. The increase in construction hiring is likely a rebound from February, when severe weather shut down many projects.
The report, known as the Job Openings and Labor Turnover survey, illustrates the rapid churn that takes place in the job market, even when hiring is fairly weak. In addition to the 4.24 million hires that took place in March, about 4 million people were laid off, fired, or quit their jobs.
Last week, the Labor Department said employers added a net 290,000 jobs in April - the most in four years - as confidence in the economic recovery increases. But the unemployment rate rose to 9.9 percent, as the new jobs weren't enough for the more than 800,000 people that resumed job searches.
With nearly 15.3 million people unemployed, competition for jobs remains stiff. In March, there were nearly 5.6 jobless workers, on average, for each opening. That compares to 1.7 jobless workers for every opening in December 2007, when the recession began.
Dyke Messinger, president of Power Curbers, a Salisbury, N.C., company that makes road construction equipment, said his U.S. business was closely tied to the housing industry, which is still struggling.
His company, which has around 130 workers, isn't hiring. He doesn't think that will change any time soon - even though he expects his international business to improve in the current quarter.
"While there are certainly some good signs for companies in other sectors of the economy, we're expecting a slow U.S. recovery this year," Messinger said.
AP Economics Writer Jeannine Aversa contributed to this report.
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