U.S. companies advertised more available jobs in December and more Americans quit, trends that The Associated Press reports could lift wages in the coming months.
The number of job openings jumped 4.9% to 5.6 million, the most since July, the Labor Department announced this morning. And quits increased 6.9% to nearly 3.1 million, the highest in more than nine years.
People typically quit for better-paying positions, so more quits are a sign that overall pay levels could increase. Employers have also struggled to fill many open jobs, which could push them to offer higher pay to attract workers.
The data comes after the government announced last week that hiring had slowed sharply in January. Yet wages grew at a solid pace, and the unemployment rate fell to an eight-year low of 4.9%.
Federal Reserve chair Janet Yellen has said that she monitors quits as a potential sign of an improving job market. More Americans quit when they either have new jobs or are confident they can find one. Some economists are encouraged by the job openings report.
“Despite the turmoil in financial markets and increasing talk of recession, the labor market continues to improve and is moving toward full employment,” says Gus Faucher, senior economist at PNC Financial. “The tightening in the job market is pushing up wages, which in turn is supporting consumer spending.”
Other analysts worry that signs of an economic slowdown could soon catch up with the job market.
“As fate would have it, the job market may be feeling healthy, just as the rest of the economy is downshifting,” says Joe LaVorgna, chief U.S. economist at Deutsche Bank.
