US Job Openings Highest Since 2008 Despite Weak Unemployment Numbers

US Job Openings Highest Since 2008 Despite Weak Unemployment Numbers
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Seasonally adjusted data from the labor department indicates that the job openings in June were the highest, since July 2008.  The Job openings – a measure of labor demand, increased to 3.76 million in June, from 3.66 million in May. The report from the labor department follows an earlier report that said a total of 163000 jobs were added in July by employers, the highest in five months. Despite such encouraging numbers, still there are 12.7 million unemployed people in June, or 3.4 candidates for each job. In July 2009, post recession, the same ratio was 7-to-1. Under normal circumstances, the ratio is usually around 2 to 1.

US Job Openings Highest Since 2008 Despite Weak Unemployment Numbers

However, the hiring rate fell from 3.4 percent in May, to 3.3 percent in June.  Since the recession, openings have increased by 57 percent, while hiring is up only 19%. Despite an increase in openings, the numbers are still below pre-recession levels of about 5 million per month.

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The increase in numbers certainly points out the fact that improvement in sales for some employers are encouraging them to hire.  “The economy is still growing, that’s underpinning labor demand,” said Henry Mo, a senior economist at Credit Suisse in New York. “Job availability is increasing, but we still need to see employers put this into action. The economy will grow a little better in the second half, than in the first half and the labor market will improve gradually.”

A surge in demand for automobiles can also be considered as a reason for rising job openings, as companies look to expand more. Honda motors posted a robust earnings report last week, with half of its profits coming from the US. Honda announced plans of investing $40 million at a Greensburg, Indiana, plant, which will employ 300 workers.

The labor department report comes at an important time during presidential election campaign. It has data that can be used by both President Barack Obama and Republican challenger Mitt Romney, to put forward their points. As Obama is already pointing that US is slowly coming out from recession. On the other hand, Romney is focusing on a rising unemployment rate.

The numbers, though comforting, are not enough. The number of jobs created per month this year was almost the same as in 2011, 150,000 jobs per month, but it’s not enough to overtake the rate of unemployment, which increased to 8.3 percent in July from 8.2% in June.

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