Is the U.S. jobs market getting better or worse? Based on Tuesday’s data, it’s hard to say.
U.S. employers in June advertised the most jobs in more than five years, but hired fewer workers, according to figures released as part of the Labor Department’s monthly Job Openings and Labor Turnover report.
Job openings rose 29,000 to 3.936 million in June from the previous month, meaning the ratio of unemployed people for every job opening was about 3 to 1.
That is a big improvement on the 7-1 ratio recorded more than four years ago at the height of the global financial crisis, but the jobs market still has quite a way to go before it could be described as healthy.
When times are good, the ratio is usually 2 to 1.
On the downside, total hiring fell 289,000 to 4.2 million in the month, which at first glance doesn't make a whole lot of sense if there are more job advertisements.
Peter Newland at Barclays explains: “We believe that this divergence between openings and hiring is consistent with our view that some of the loss of employment during the recession was structural, rather than purely cyclical, in nature.”
That means some jobseekers, particulary those who have been out of work for a long time, can't find a job because they lack the necessary skills for the positions available.
In other bad news, the number of workers quitting their jobs in June fell 73,000 from May to fewer than 2.2 million.
In a strong jobs market, when workers are confident of finding another position, 2.5 million to 3 million workers typically quit every month.
On a positive note, layoffs fell by 215,000 to 1.5 million in June.
The U.S. Federal Reserve is closely watching Tuesday’s numbers, along with other jobs data, for signs on when to start winding down its monetary stimulus program.
In the wake of Tuesday's data and Friday’s jobs report, which showed employers added 162,000 jobs in July, the lowest number in four months, they’ll probably be inclined to keep buying bonds for the time being.