- Nariman Behravesh, chief economist at IHS
The number of job openings in the US surged more than expected in December, adding to signs that the labour market continues to improve. According to the Labor Department, US companies advertised 4.9% more jobs in the reported month, totalling 5.6 million, the most since July. The JOLTS report is among the data closely watched by the Fed officials. The increase raised the job openings rate to 3.8% from 3.6% in November. At the same time the hiring rate remained unchanged at 3.7%, indicating that employers faced challenges to find qualified workers for vacant positions. A total of 3.1 million Americans quit their jobs in December, the highest number since 2006, pushing the quits rate, a measure of confidence in the jobs market, to 2.1%, the highest level since 2008. The report came ahead of Fed Chair Janet Yellen testimony to Congress later in the day. A number of disappointing economic reports, plunging oil prices and a stock market sell-off have fuelled doubts as to whether the Fed would raise interest rates this year.
However, the data last week showed the US unemployment rate declined to 4.9% in January, down from 5.0%. In addition to that, average weekly earnings increased 12 cents an hour or 0.5% on a monthly basis, translating into a 2.5% annualized gain. As the unemployment rate remains low, many economists expect Americans to see paychecks increase.
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