The rapid hiring that made 2014 a stellar year for job gains is showing no sign of slowing down.
U.S. employers advertised the most job openings in nearly 14 years in November, the Labor Department said Tuesday. That suggests businesses are determined to keep adding staff because they are confident strong economic growth will create more demand for their goods and services.
Job openings rose 2.9 percent to 4.97 million in November, the most since January 2001. More job vacancies generally lead to more hiring. Employers have been slow to fill their openings for most of the recovery, but that started to change last year as companies ramped up their overall hiring.
There are always some open jobs even in a depressed economy. Job vacancies fell to 2.1 million in July 2009, one month after the Great Recession ended. Vacancies have soared in the past year, raising questions about why they aren’t being filled more quickly.
Last week’s jobs report showed that employers added 252,000 jobs in December, capping the strongest year for hiring in 15 years.
Yet that figure is a net total of job gains or losses. Tuesday’s data on job openings is from the Job Openings and Labor Turnover survey, or JOLTS, which provides a more detailed look at the job market than the monthly employment report. It also includes figures for overall hiring, as well as the number of quits and layoffs.
Hiring, as reported in the JOLTS report, slipped to 4.99 million in November from a nearly seven-year high of 5.1 million in October.
The number of open jobs has risen a blistering 21 percent in the 12 months ending in November. Yet total hiring has increased only 9.1 percent.
Economists offer several reasons why businesses aren’t filling their vacancies more quickly:
- Many employers are too picky and expect to find a large pool of highly-qualified applicants because unemployment is still elevated. There are 8.7 million Americans out of work and 7 million more who are working part-time but would prefer full-time jobs. “Many companies still think they are living in a world of unlimited supply where they can pick and choose employees as they please,” said Joel Naroff, president of Naroff Economic Advisers. That keeps available jobs open for longer.
- The unemployed don’t have the right skills for the jobs that are available. This view assumes that there are millions of unemployed construction workers or factory employees, for example, who aren’t able to find work in growing sectors such as health care. There are some highly-skilled jobs in software development or advanced manufacturing that do appear to be hard to fill. But some economists point out that there are more unemployed workers than open jobs in nearly every major industry. If there was a so-called “skills mismatch,” you would expect to see that in only some industries.
- Employers may not be offering high enough pay to attract needed employees. Average hourly wages actually slipped in December, according to Friday’s jobs report, even as hiring has been robust. Hourly pay increased just 1.7 percent in 2014, barely ahead of the 1.3 percent inflation rate. There are a few signs this could soon change: Aetna said Monday that it would raise its minimum hourly wage to $16 an hour, boosting income for about 5,700 employees.
There were 1.8 unemployed workers on average for each opening in November, about the same as before the recession. That is down sharply from the peak of 6.7 just after the recession. That suggests that employers could soon be forced to offer higher pay to attract new employees.