In July this year, job openings hit a record high, closing in on 7 million amid a big jump in vacancies for manufacturing and finance, the Labor Department reported on Tuesday.
The number of vacancies outnumbered the number of people who were classified as unemployed by a whopping 659,000 for the month. This was an unprecedented trend that began earlier this year. Openings increased by 117,000 from June, to 6.94 million, and are up 737,000 compared to the last year year. This is nearly a 12 percent increase, the department said in its monthly Job Openings and Labor Turnover Survey.
The “quits” rate is a very good indicator of worker confidence as it measures those who left their positions voluntarily. This rate also hit a record of 3.6 million, a gain of 106,000, according to Bureau of Labor Statistics records that go back to almost 18 years in December 2000. The quits rate of 2.4 percent was up one-tenth of a percentage point from a month ago and is the highest recorded since the month of April 2001.
The biggest sector for quits was the accommodation and food services at 61,000 .
The finance & insurance and non-durable goods manufacturing registered the biggest gains in job openings at 46,000 and 32,000 respectively.
However, openings decreased in educational services (-34,000), retail (-85,000), and federal government (-19,000).
New hires totaled 5.68 million. This was a very marginal increase from June, but it was in increase of 3.3% from the same month last year.
The labor force participation rate declined 0.2 percentage points to 62.7 percent. Whereas the employment-to-population rate also declined 0.2 percentage points to 60.3 percent.
The JOLTS (Job Openings and Labor Turnover Survey) news comes just a few days after the Labor Department had announced that the economy added 201,000 nonfarm positions in August. This was the month that also saw a post-recession high of 2.9 percent increase in average hourly earnings compared to a year ago.
The increase in job and wages are seen as a very significant contributing factor that will push the Federal Reserve to approve another interest rate increase later in September this year.
There are other economic signs which are strong as well. According to the Atlanta Fed’s tracker, the GDP has increased 4.2 percent in the second quarter and is now on track to eclipse 4 percent one more time in the third quarter of this financial year.
Manufacturing surveys are also on the rise, and the NFIB (National Federation of Independent Business) reported on Tuesday that its sentiment gauge has hit a new record in August.