WASHINGTON (Reuters) - U.S. job openings fell in May from a record high amid a surge in hiring, but an increase in the number of Americans voluntarily quitting their jobs suggested the labor market remained robust.
Job openings, a measure of labor demand, decreased 301,000 to a seasonally adjusted 5.7 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS) on Tuesday.
The drop pushed the jobs openings rate to 3.7 percent, the lowest reading this year, from a nine-month high of 3.9 percent in April. Hiring jumped to 5.47 million from 5.04 million the prior month.
There were broad increases in hiring from manufacturing to retail and professional and business services. That narrowed the gap between job openings and hiring, which had raised concerns of a troubling skills mismatch in the economy.
The hiring rate climbed two-tenths of a percentage point to 3.7 percent. Economists shrugged off the dive in job openings, which they attributed to the rise in hiring.
“The job openings plunge in May shows further evidence that the economy is hitting the wall of full employment,” said Chris Rupkey, chief economist at MUFG in New York.
“As the economy ages there’s going to be fewer available jobs out there simply because companies have hired all the workers they need for now.”
The so-called JOLTS report is among the data watched by Federal Reserve officials to get a pulse on both the labor market and inflation.
Pointing to labor market strength, 3.2 million Americans voluntarily quit their jobs in May, lifting the quits rate to 2.2 percent from 2.1 percent in April. This rate, which the Fed looks at as a measure of job market confidence, has rebounded from a low of 1.3 percent in late 2009.
Despite the labor market nearing full employment, with the jobless rate at 4.4 percent, wage growth has remained frustratingly sluggish.
Average hourly earnings have failed to break above 2.5 percent on a year-over-year basis. Economists say a growth rate of between 3 and 3.5 percent in wages is needed to bring inflation near the Fed’s 2 percent target.
“We look to quits rate to gauge workers’ willingness to
leave current positions in search of higher wages,” said Sarah House, an economist at Wells Fargo Securities in Charlotte, North Carolina. “Coupled with increased hiring across sectors, the equally broad-based increase in the quit rate should bode well for wage gains.”
Layoffs were little changed at 1.7 million in May, holding the layoffs rate at 1.1 percent for an eighth straight month.
Reporting By Lucia Mutikani; Editing by Tom Brown