The number of unemployed people per vacant job in the US has fallen to its lowest level since November 2008 in a sign that the labour market continues to heal.
The reassuring numbers from the Bureau of Labor Statistics, which also show more people choosing to quit their job voluntarily, suggest that recent weak US jobs growth may be due to the unusually warm winter rather than an economic downturn.
Non-farm payrolls rose by only 154,000 new jobs in March and 115,000 in April, giving rise to fears of a “spring slowdown”, but the new data show a continuing increase in job openings and the number of people quitting their job.
“You don’t leave your job unless you have another job to go to,” said John Canally, an economist at LPL Financial in Boston. “I think it kind of confirms the weather story and that we’re not seeing the same kind of sharp deterioration in the labour market that we saw last summer.”
The data on job openings and labour turnover – called Jolts – come from a different survey to the regular payrolls numbers. They are closely followed at the US Federal Reserve and elsewhere as a guide to the underlying dynamics of the labour market.
Job openings rose by a seasonally adjusted 172,000 in March, according to the latest report, leaving 3.4 unemployed people per available job. That ratio was down from 3.6 the month before and above 6 at the end of the recession in 2009.
The percentage of workers leaving a job who quit voluntarily rose to 52 per cent in March – the highest level since the beginning of the recession – but the absolute number of people quitting jobs, at 2.1m in March, remains well below the 2.5m-3m level common before the recession.
“In our view, data such as the ratio of unemployed to job openings suggest that the labour market is continuing to recover, and this idea is supported by indicators such as the unemployment rate, which fell to 8.1 per cent in April,” noted economists at Barclays Capital in New York.
A separate survey showed rising confidence among small business owners, with companies increasing recruitment and spending plans despite their remaining concerns about the health of the US economy.
The National Federation of Independent Business’s index, which tracks optimism among smaller companies, rose 2 points in April to 94.5 – as high as it has been since the end of the last expansion in December 2007. The index normally hovers around 100 during good economic times.
“Job creation plans, job openings and capital spending plans all increased. Hopefully, this performance will hold in the coming months,” said Bill Dunkelberg, NFIB chief economist.
The index showed strong improvements in small business profit trends and some signs of greater pricing power. Capital spending intentions rose to their highest level since June 2008.
Ian Shepherdson, chief US economist at High Frequency Economics, said that a March dip in the index was likely to be a result of a jump in petrol prices.
“Today’s rebound supports that idea. The spike in gas prices interrupted the underlying improvement in the index … With gas prices now dropping sharply, we expect new highs in the NFIB over the next few months,” he said.
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