By Lucia Mutikani
U.S. job openings increased to a record high in March as worker shortages persisted, suggesting that employers could continue to raise wages and help keep inflation uncomfortably high.
The Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday also showed a record 4.5 million people voluntarily quit their jobs, underscoring the growing wage pressures. The government reported last week that compensation for American workers notched its largest increase in more than three decades in the first quarter.
“For the economy, this points to another strong jobs report on Friday, and for workers, this means continued strong wage increases, especially for those who change jobs,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia. “The situation likely will continue well into this year given the Federal Reserve’s efforts to cool the labor market probably won’t gain traction for months.”
Job openings, a measure of labor demand, rose by 205,000 to 11.5 million on the last day of March. The second straight monthly increase lifted job openings to the highest level since the series started in 2000. The retail sector led the rise, with an additional 155,000 unfilled jobs. Manufacturers of long-lasting goods reported 50,000 more vacancies.
But job openings decreased by 69,000 in the transportation, warehousing and utilities industry. State and local government education had 43,000 fewer vacancies, while job openings in the federal government decreased by 20,000.
Job openings increased in the South but fell in the Northeast, Midwest and West. Economists polled by Reuters had forecast 11 million vacancies.
The JOLTS data is being closely watched by Federal Reserve officials, who have adopted an aggressive monetary policy stance as they battle sky-rocketing inflation, with annual consumer prices surging at rates last seen 40 years ago.
The Fed is expected to hike interest rates by half of a percentage point on Wednesday, and likely to start trimming its asset holdings soon. The U.S. central bank raised its policy interest rate by 25 basis points in March.
The job openings rate climbed to 7.1% from 7.0% in February. Hiring fell by 95,000 jobs to 6.7 million in March.
Quits increased by 152,000, lifting the total to a record 4.5 million. They were concentrated in the professional and business services industry, where resignations increased 88,000. In the construction sector, quits rose by 69,000. The number of quits increased in the South and West.
The quits rate rose to 3.0% from 2.9% in February. The quits rate is viewed by policymakers and economists as a measure of job market confidence. The higher quits rate suggests wage inflation will likely continue to build up as companies scramble for workers.
Layoffs increased in March but remained at low levels.
Reuters
