U.S job openings rose 2.2% in January after the 5% drop last December. The improving economy and investor confidence provided 157,000 more jobs, an indication of stronger economic growth in the US.
With the unemployment rate at about 7.9%, Wall Street believes that American companies will start to progress and provide more jobs. According to the Department of Labor, job openings have been low from November to December 2012. American companies laid off workers the lowest in January 2013, while the number of Americans quitting their jobs rose the highest after four years. However, reports have viewed this positively since more people quitting jobs suggests that it has become easier to shift jobs.
Improvement in Investor Confidence
The all-time high of Dow Jones and the progress in S&P’s 500-stock index have strengthened investor confidence in America’s growing economic strength. The stimulus program of the Federal Reserve helped the corporate sector of America, but did not give much improvements in the lives of the workers. The Federal Reserve’s stimulus program called “Quantitative Easing” regulated the interest rates until the unemployment rate lowers down to 6.5%. However, the recent employment reports showed the strongest numbers and it was a strong indicator that the Federal Reserve’s program is now being felt by the American workers. In return, the effect pushes up sales for American companies.
Significant Drop in Unemployment Rate
The professional and business services got the biggest increase in the job openings, including high-paying fields such as engineering, architecture and accounting. Job openings were also provided to temporary jobs and retail was the next largest gain. The numbers were better in February as employers posted 236,000 job openings. From January’s unemployment rate of 7.9%, the number suddenly fell to 7.7% – a four-year low. The job openings in the month of February capped the four-month hiring bonanza, which showed an average of 205,000 job openings per month.
The Job Openings and Labor Turnover Survey or better known as JOLTS, computes for the total hiring, quits, layoffs and other factors affecting employment. The report showed a slow process in the filling of jobs by employers and there has not been a significant difference in the total hiring against job openings. With less layoffs from employers and accelerated net hiring, employers have obviously become more confident about their prospects despite taxes and gas prices. Other reports have been showing great news as well. The ManpowerGroup’s quarterly survey showed that 18% of the 18,000 U.S employers are adding more job openings in the second quarter, while only 5% will layoff workers.
A Stronger Economy on its Way
The strengthening economy has been providing more job opportunities to the unemployed. The recovery in housing and increasing sales in the automotive sector have contributed largely to a stronger economic growth. During the fourth quarter in 2012, the U.S experienced the highest increase in sales per share. The boost in sales have provided employers more money to place in the pockets of their employees. Wall Street economists such as Goldman Sachs and William H. Gross have increased their projection for the year’s economic growth based on the jobs data in February. According to Jim O’Sullivan, chief United States economist at the High Frequency Economics, increased employment will lead to increased spending and it is how growth feeds on itself.
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