U.S. job openings, quits hit record highs in April
U.S. job openings surged by nearly one million to a new record high in April, while more people voluntarily left their employment, strengthening the view that a recent moderation in job growth was due to supply constraints.
The Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday also showed layoffs hit a record low in April. Millions of unemployed Americans remain at home because of trouble securing child care, generous unemployment benefits and lingering fears over COVID-19 even as vaccines are widely accessible and the pandemic is subsiding.
“The evidence continues to grow that the lackluster job creation of recent months is a result of constraints on labor supply and that the labor market is tight,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
Job openings, a measure of labor demand, increased by 998,000 to 9.3 million on the last day of April, the highest level since the series began in December 2000. Vacancies rose in all four regions and were spread across nearly all industries as well as the government sector.
Unfilled jobs in the accommodation and food services increased by 349,000. There were an additional 115,000 job openings in other services, while vacancies at manufacturers of long-lasting goods increased 78,000. But job openings decreased in educational services and mining and logging industry.
Economists polled by Reuters had forecast job openings would rise to 8.3 million in April. The job openings rate shot up to an all-time high of 6.0% from 5.4% in March.
Hiring inched up to 6.1 million in April from 6.0 million in the prior month. The government reported last Friday that job growth picked up in May, with employers raising wages, but the pace of hiring was below economists’ expectations for a second straight month.
Companies are struggling to find workers even as about 9.3 million people are officially unemployed. Economists expect the labor market disconnect will be resolved in the fall. Government-funded unemployment benefits will end in early September. Republican governors in 25 states, accounting for more than 40% of the workforce, are ending federal government unemployment benefits, including a $300 weekly subsidy, starting on Saturday.
Schools are set to fully reopen in the fall and more people are expected to be vaccinated against COVID-19. At least half of the adult American population is fully inoculated.
The JOLTS report also showed 384,000 people voluntarily quit their jobs in April, lifting the total to a record 4.0 million. About 106,000 retail workers left their jobs, while professional and business services saw 94,000 resignations.
In the transportation, warehousing and utilities industry, 49,000 workers quit. The number of quits rose in the South, Midwest and West regions. The quits rate increased to an all-time high of 2.7% from 2.5% in March.
The quits rate is normally viewed by policymakers and economists as a measure of job market confidence. But nearly 1.8 million women have left the labor force since February 2020 mostly because of problems related to child care.
With willing workers scarce, layoffs and discharges dropped by 81,000 to a record low 1.4 million. There was a 0.95 open job per unemployed person in April. Rising job openings and voluntary quits could pressure employers to raise wages.
Stocks on Wall Street were mixed. The dollar rose against a basket of currencies. U.S. Treasury prices were higher.
TRADE GAP NARROWS
A separate report from the Commerce Department on Tuesday showed the reopening economy was leading to a shift in domestic demand back to services from goods, with the trade deficit retreating from a record high in April as imports fell.
The trade deficit dropped 8.2% to $68.9 billion in April. The gap widened to a record $75.0 billion in March. Economists had forecast a $69.0 billion trade deficit.
Goods imports dropped 1.9% to $232.0 billion. The decline was led by a $2.6 billion drop in imports of consumer goods, which reflected decreases in textile apparel, toys, games and sporting goods as well as household appliances. Imports of motor vehicles, parts and engines also fell.
But imports of cell phones and other household goods increased. Imports of foods, feeds and beverages were the highest on record as were of those of capital goods. Imports of services increased $0.7 billion to $41.9 billion in April. They were lifted by travel and transport services.
“With the pandemic coming under control, consumers are redirecting their spending towards domestically produced services and away from imports,” said Bill Adams, a senior economist at PNC Financial in Pittsburgh, Pennsylvania.
Exports of goods gained 1.1% to a record $145.3 billion, boosted shipments of civilian aircraft. Exports of industrial supplies and materials were the highest on record, with crude oil shipments rising $1.0 billion. But exports of motor vehicles, parts and engines fell. Auto production has been hit by a global semiconductor shortage.
Exports of foods, feeds and beverages were the highest on record. Exports of services increased $0.7 billion amid small gains in travel, transport and charges for the use of intellectual property.
At $17.8 billion in April, the services surplus was the smallest since August 2012. Exports are likely to continue rising as global economic growth gains momentum.
When adjusted for inflation, the goods trade deficit decreased $7.2 billion to $98.6 billion in April.
Trade was a drag on gross domestic product growth in the first quarter. Most economists expect double-digit GDP growth this quarter, after the economy grew at a 6.4% annualized rate in the third quarter.
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