Hiring managers have their fingers directly on the pulse of the U.S. economy, and they’re feeling a steady heartbeat of demand.
While financial markets may be signaling the world’s largest economy is inching toward recession, recent labor-market data shows persistent hiring, near-record job openings and growing confidence among workers to quit their jobs on prospects they’ll easily find another.
Of particular significance is the fact that job gains over the last three months are occurring in the most cyclically sensitive industries — construction and, more surprisingly, manufacturing.
“Job changes in these two sectors are often a harbinger of changes in the business cycle,” Joe Carson, director of global economic research at AllianceBernstein, wrote this week in an email to clients. This shows “the business cycle is alive and well — despite the volatility in the financial markets.”
Over the last three months, payrolls at construction firms and factories have increased by 176,000. That’s the second- biggest gain over a similar period since March 2006.
Figures out Tuesday from the Labor Department showed job openings rose in December to 5.61 million, the second-highest level on record, a sign companies are looking past tepid global growth and anticipating the U.S. economy will keep forging ahead.
The report showed the job-openings rate at construction companies in December was the highest since February 2007, while in manufacturing it rose to a record in data going back to 2000, propelled by demand among non-durable goods industries.
As labor-market conditions continue to tighten, there’s a growing willingness of workers to leave their jobs. The so-called quits rate rose to 2.1 percent, the highest since April 2008.
That’s good news for wage growth, which has been a laggard in this economic recovery.
“You tend to see higher wage growth when there’s more churn in the jobs market,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research in New York. “This quits rate is a sign of stronger wage inflation” to come.
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