The number of Americans hired and the total quitting jobs both surged to nine-year highs in December, reflecting a more dynamic labor market that’s starting to push up wages. Job openings also jumped from 5.3 million to 5.6 million, the highest level since July, the Bureau of Labor Statistics said Tuesday in its Job Openings and Labor Turnover Survey. Through most of the jobs recovery, openings have outpaced hiring and quits.
In December, however, the number of hires climbed from 5.3 million to 5.4 million. That’s the highest since November 2006. The job growth totals reported by the Labor Department each month have been strong, but they reflect net gains after factoring in new hires and layoffs. The strong rise in hires shows that employer demand has strengthened. Hiring picked up in professional and business services; leisure and hospitality; and trade, transportation and utilities. It slowed in construction; education and health services; and manufacturing.
Meanwhile, the number of people quitting jobs in December jumped from 2.9 million to 3.1 million, highest since December 2006. A larger number of Americans switching jobs indicates a more vibrant labor market in which workers are confident enough to leave one job for another. The economy added a net 262,000 jobs in December, soundly beating estimates and capping blockbuster average monthly gains of 279,000 in the fourth quarter, according to a revised estimate released by BLS last week. Job growth sputtered in January, with employers adding just 151,000 jobs, though economists said a slowdown was expected after the outsized gains late last year.
Tuesday’s report could give Federal Reserve policymakers more evidence that the labor market is heating up and wages are poised to rise more rapidly, a development that should begin to put upward pressure on meager inflation. After lifting its benchmark interest rate in December for the first time in nine years, the Fed is weighing another rate hike in March but overseas weakness and volatile stocks are giving Fed officials pause.