Job Openings in U.S. Increased in May

Following three months of very weak hiring, employers in the United States advertised more jobs in May than in April. On Tuesday, the Labor Department announced that job openings increased to a seasonally adjusted number of 3.6 million. That number is slightly higher than the 3.4 million in April. The number is the second highest in roughly four years, coming in second to the 3.7 million in March of 2012.

An increase in job openings could signal an increase in hiring within the next couple of months. It usually takes anywhere from one to three months to fill a job opening. Michael Feroli, an economist for JPMorgan Chase, wrote the following in a note to clients: “The report suggests business attitudes toward hiring are not in complete free-fall.”

Even though there has been an increase in job openings, the competition for those jobs is still incredibly fierce. In May there was a total of 12.7 million unemployed workers, which is an average of 3.5 unemployed for each position. That ratio was a decrease from the 3.7 ratio in the month of April. In a strong job market, the ratio is 2 to 1.

According to the employment report released on Friday by the government, the economy added only 75,000 net jobs per month for the April-June quarter. That number is just about a third of the average monthly jobs that were added in the quarter for January-March. Over the past year, governments and businesses have been incredibly slow filling jobs.

Since the month of May in 2011, job openings have increased by over 18 percent but gross hiring has increased by just 4 percent in that same span. Compared to June 2009, openings are 50 percent higher now but still fall below the pre-recession levels of 5 million openings per month. The report released on Tuesday, the Job Openings and Labor Turnover survey, analyzes gross hiring, which rose to 4.36 million in May. That is the second-highest level for gross hiring in two years. The number of layoffs in May increased to the highest level since July of 2010.

The weaker job market has also caused smaller pay increases, which means that wages for people who have jobs are not able to keep up with inflation numbers. It is a vicious circle because a lack of jobs and higher pay keeps people from spending, which increase economic growth. Close to one-third of the jobs added in June were temporary jobs, which could be a good sign in that employers might be willing to hire permanent workers very soon.