The fewest workers on record were
fired in January and job openings rebounded, showing employers
are gaining confidence the U.S. expansion will be sustained even
as lawmakers battle to trim the federal budget deficit.
There were 1.51 million people let go in the month, down
from 1.57 million in December and the least in data going back
12 years, the Labor Department said today in Washington. The
number of positions waiting to be filled climbed by 81,000 to
3.69 million after slumping by 177,000 in December.
The report shows recent payroll gains are being driven more
by a reduction in dismissals than a surge in hiring, indicating
sales are strong enough for companies to retain current staff.
Acceleration in employment is needed for the labor market to
make further progress and push down the nation’s 7.7 percent
“The fact that the firings are abating shows just how
tight the labor-force components are for business,” said
Russell Price, a senior economist at Ameriprise Financial Inc.
in Detroit and the top-ranked payroll forecaster in the past two
years, according to data compiled by Bloomberg. “Businesses are
becoming increasingly confident in the economic outlook.”
Stocks fell after a seven-day rally in the Standard &
Poor’s 500 Index that drove the gauge to within nine points of a
record. The S&P 500 declined 0.3 percent to 1,552.2 at 1:01 p.m.
in New York.
Elsewhere today, U.K. industrial production unexpectedly
fell in January as factory output slumped, fueling concern
Britain may slip into another recession, figures from the Office
for National Statistics showed in London.
The pace of firings has probably slowed further going into
this month. The number of Americans filing for unemployment
benefits declined to a six-week low in the seven days ended
March 2, the Labor Department reported last week. An average
348,800 a week filed jobless claims over the past month, the
fewest in five years.
Today’s report helps shed light on the government’s monthly
jobs data. Payrolls grew by 119,000 workers in January and
219,000 in December. Job creation accelerated in February, with
employment rising by 236,000, the Labor Department said March 8.
The number of openings in January was still short of the
four-year high of 3.85 million reached in March 2012. Help
wanted waned in December as the Obama administration and
Congress locked horns over how to prevent the tax increases and
budget cuts that came to be known as the fiscal cliff.
The number of workers hired in January increased to 4.25
million from 4.2 million in December, leaving the hiring rate
unchanged at 3.1 percent, according to today’s report. The rate
peaked at 3.4 percent for a couple of months in the first half
“The pace of hiring is still not great,” said Daniel Silver, an economist at JPMorgan Chase & Co. in New York.
“The labor market is going fairly steady. It could be a lot
better, but it also could be a lot worse.”
Job openings at professional and business services led the
gains in January, followed by trade, transportation and
utilities. The latter was propelled by a jump among retailers.
Health care and social assistance companies showed the
biggest decline in jobs available.
In addition to the decrease in firings, another 2.22
million people quit their jobs in January, up from 2.13 million
in the prior month and the most since October 2008. The
combination of fewer dismissals and the increase in those
voluntarily leaving their jobs kept the total separations rate
at 3 percent.
An increase in the number of workers quitting their jobs
shows growing confidence in the odds of finding new work, said
Janet Yellen, vice chairman of the Federal Reserve, who is among
policy makers looking at these data to determine when the job
market has made enough progress to reduce stimulus.
“Layoffs and discharges as a share of total employment
have already returned to their pre-recession level, while the
hiring rate remains depressed,” Yellen said in a speech last
week. “Therefore, going forward, I would look for an increase
in the rate of hiring. Similarly, a pickup in the quit rate,
which also remains at a low level, would signal that workers
perceive that their chances to be rehired are good.”
She said the central bank should press on with $85 billion
in monthly bond buying while tracking possible costs and risks
from the unprecedented program. She echoed Chairman Ben S.
Bernanke’s comment the previous week that the benefits of the
Fed’s historically low interest rates and near-record $3.09
trillion balance sheet outweigh any risk of financial
In the 12 months ended in January, the economy created a
net 2 million jobs, representing 52 million hires and about 50
million separations, today’s report showed.
Considering the 12.3 million Americans who were unemployed
in January, the figures indicated there were about 3.3 people
vying for every opening, up from about 1.8 when the recession
began in December 2007.
Employers in all 50 states and the District of Columbia
reported positive hiring plans for the second quarter, according
to a survey of more than 18,000 companies by Manpower Inc. (MAN)
issued today. Those in the leisure and hospitality and
professional and business services industries had the most
positive outlooks. In addition, the share of employers
anticipating having to cut staff, at 5 percent, was at the
lowest since 2000.
More recent data show the labor market gained strength in
February. The unemployment rate fell to 7.7 percent from 7.9
percent in January and industries from film-making to accounting
to construction powered broad-based gains as employers remained
confident in the face of federal budget cuts and tax increases.
Private payrolls grew by 246,000, the most since November.
The strength came before $85 billion in automatic across-
the-board budget cuts, known as sequestration, began to kick in
on March 1 after Congress failed to reach a compromise on
deficit reduction. That followed a 2 percentage-point increase
in the payroll tax in January.
Maintaining labor market momentum will help those still out
of a work, like Jim Barry, find employment. Barry was let go in
2009 from his purchasing position at Girl Scouts of Connecticut,
where he had worked for two years. Searching for a job, he says
he’s sent out at least 120 resumes.
“There’s what’s called the black hole,” said Barry, who
has a graduate degree in choral conducting from Yale University
in New Haven, Connecticut. “You never hear back from them. You
lose track after a while.”
Amid the search, Barry said he has kept his part-time job
as a church musician in the greater Hartford area, which he has
held since 2007. He works 10 hours to 15 hours a week and is
living on the income from the job in addition to his savings.
“It limits my ability to purchase,” he said. “I don’t go
to the store very often. I don’t do many vacations. It just
limits what you can do.”
Barry’s job-finding prospects may improve in coming months,
according to the Conference Board’s Employment Trends Index,
released yesterday. The measure of job prospects in the U.S.
climbed in February by the most in a year.
General Motors Co. (GM) is among companies planning to expand.
The Detroit-based automaker said last week it plans to hire
1,000 staffers for its information technology operations center
in the Phoenix area. The hiring is part of GM’s plan to add
about 7,500 information technology workers.
To contact the reporter on this story:
Alex Kowalski in Washington at
To contact the editor responsible for this story:
Christopher Wellisz at email@example.com
Job Openings Increased in January as U.S. Labor Market Improved – Bloomberg