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Job openings in U.S. highest since 2001 but hiring drops

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In August, job openings in the United States increased to the highest number in 13 years, spurred by the increased confidence by companies to add employees to their workforce.

However, the bad news for jobseekers is that the number of hires is decreasing.

According to data issued by the United States Labor Department, job openings numbered a total of 4.84 million in August, which is the highest level since the month of January 2001 and increased from the 4.61 million listed job openings in the previous month.

The increase in job openings is a factor in the recovery of payrolls, which pushed the rate of unemployment to a six-year low, serving as a sign to Americans that there will be sustained increases in hiring stretching to next year.

All the gathered data are included in a package that Janet Yellen, chairwoman of the Federal Reserve, and her colleagues are using to measure the health of the labor market, which aids in determining if the central bank will begin to increase its benchmark interest in transactions.

According to JPMorgan Chase & Co. chief U.S. economist Michael Feroli, the job market remains healthy.

"Job openings have some indicative power beyond just one month ahead. It probably isn't decisive, but it does tell you conditions are going to be pretty good for hiring in the fourth quarter," he said.

However, despite the relative health of the job market, the hiring rate of companies has decreased to 3.3 percent in August, which is a decrease from 3.6 in July and the lowest rate since January.

The hiring rate is determined by dividing the total number of new hires with the workforce population that worked or acquired salaries for the month.

According to Yellen, the observed failure of hiring to increase, along with the increase in job openings, shows that companies see that the currently presented opportunities for economic growth are still not enough to justify including more employees under their payroll.

Another reason for the low hiring rate could be the fact that companies are finding it difficult to fill the open positions with qualified candidates.

The jobseekers themselves could be the reason for the low hiring rate as well. With data showing that retailers, providers of healthcare, restaurants and hotels are included in the industries that showed the highest increases in job opportunities in August, jobseekers may be avoiding these job opportunities as they are in the lower portion of the pay scale.

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