About 6.5 million Americans voluntarily quit their jobs last March and February rising up the measure of job market confidence to 2.3 percent.
The U.S. job opening positions rate of this year hit all-time highest record to 4.2 percent, while hiring fell to 5.4 million from 5.5 million in February, suggesting a skills mismatch.
“Quits are a source of upward pressure on wages. The majority of workers who voluntarily change jobs receive a pay bump, generating stronger wage growth for job switchers.” Said a senior economist in North Carolina.
Wage growth as measured by average hourly earnings has remained moderate, increasing 2.6 percent year-on-year in April. But other gauges of wage growth have been more robust.
Job Openings and Labor Turnover Survey, or JOLTS, released by The Labor Department on Tuesday showed a sign of confidence in the labour market that economists believe will help to push up wage growth this year.
The JOLTS report bolsters expectations that inflation will accelerate and keep the Federal Reserve on track to raise interest rates at least two more times this year.
“The labour market is getting hotter by the day so central bankers need to continue to take the punch bowl away because higher wages and greater inflation are on the way,” said Chris Rupkey, chief economist at MUFG in New York.
“The big difference reflects a skills mismatch, geographical mismatch and tight labour market. As a result, wage pressures are likely to heat up if employers can hope to boost hiring and meet their customers’ needs,” said Sophia Koropeckyj, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.
The professional and business services industries have had last month 112,000 additional vacancies. The construction industry had 68,000 more job openings and transportation companies in warehousing, and utility sector had 37,000 unfilled positions.
The Employment Cost Index, widely seen by policymakers and economists as one of the better measures of labour market slack, showed wages rising at their fastest pace in 11 years in the first quarter.