US job openings tick up to new record high
US businesses posted the most job openings on record in April for the second straight month, underscoring the economy as strong demand for workers.
The number of available jobs rose 1 per cent to 6.7 million from 6.6 million in March, the Labor Department said today. 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 per cent. Faster consumer spending is expected to lift economic growth above a 3 per cent 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 per cent 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 per cent, hourly pay was up nearly 4 per cent.
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 per cent, on average. But in December 2000, near the peak of the late 1990s boom, they were getting raises of 6.5 per cent.
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