US job growth seems favorable in short term, hiring remains subdued

The United States recent report on job openings and labor turnover (JOLTs) indicate that the job growth perspective will remain strong, with lay-offs taking a mild downturn. Though the hiring rate in the private sector remains soft, the growth in the job sector remains hopeful, at least in the short-term on record-high job postings.

"With neither layoffs nor postings showing signs of moving away from their extreme readings, we would not look for job growth to begin fading, at least in the near term," Daiwa said in a recent research note.

The JOLTs report does not contain an estimate of monthly job growth, but figures on hiring and separations. Such a calculation shows average job growth of 227,000 over the past 12 months of 2015, almost identical to the average of 229,000 from the monthly payroll report, reports confirmed.

"While the outlook for job growth seems favorable, we do not expect activity to accelerate from its recent pace," the brokerage said in its report.

According to projections made by the brokerage, the JOLTs report might offer insights into the absence of wage acceleration in the face of generally favorable conditions in the labor market. Firms are not pressing to hire, and thus they do not see a need to step-up wage rates to attract workers and hence, individuals are reluctant to begin aggressive bargaining for wage gains.