Thumbs Up: U.S. Job Openings Increase in Latest Hopeful Indicator

By MARK WHITEHOUSE and SARA MURRAY

U.S.
companies are gradually ratcheting up their search for workers, a new
Labor Department survey showed, which some economists see as a signal
that the steep decline in the job market could be nearing an end.

The Labor Department's Job Openings and Labor Turnover Survey found
that the number of job openings in the U.S. increased slightly in both
August and September, the first two-month rise since early 2007.
Hotels, restaurants, education and health care made the largest
contributions; even such hard-hit sectors as manufacturing saw a rise.

Getty Images

A job fair in Los Angeles on Tuesday attracted hundreds of veterans.

"This
is a hopeful sign," said Richard Berner, chief U.S. economist at Morgan
Stanley in New York. "It suggests improvement in the broader labor
market is possible within a few months."

The uptick in openings -- which include newly created or just
vacated positions -- comes as other indicators have offered conflicting
signals on the direction of what has been the worst job market in
decades. On Friday, the government reported that the unemployment rate
hit 10.2% in October, and economists believe the rate will remain above
prerecession levels through 2019. At the same time, nonfarm payrolls
shrank less than in previous months, suggesting the situation is
worsening at a slower rate.

Separate reports on small business and extended layoffs Tuesday
provided more clues that stabilization could be on the way. The
National Federation of Independent Business reported that
small-business sentiment improved slightly in October. Over the next
three months, 16% said they plan to reduce employment, unchanged from
the previous month's survey, and 9% said they plan to add workers, up
two percentage points from last month.

Meanwhile, the Labor Department reported that the share of companies
planning to recall workers laid off for at least 31 days rose to about
33% in the third quarter, from 29% a year earlier. Still, the number of
such extended mass layoffs was at its highest point for any
third-quarter period since at least 1995.

Economists
found reason for optimism in the details of Tuesday's report on job
openings. The rate of new hires as a percentage of all employment
stayed steady at 3.1% for the second month in a row, suggesting
openings are turning into actual employment. Perhaps more important,
companies in sectors that tend to move in sync with the broader economy
-- such as manufacturing and professional services -- added to their
job openings for two straight months.

"This rise in manufacturing bodes well for at least a mild recovery
in other areas," said Steven Wieting, U.S. economist at Citi Global
Markets.

Maurice Toueg, a partner at executive-search firm
CapstonePartnership, which specializes in hiring finance professionals,
said he is feeling a bottom in the market. Recently, he said, one
candidate turned down a strategy job at an investment bank paying more
than $200,000 -- the first time he had seen that happen in a year.

"Once you start to see candidates turn down jobs, clearly the market
has started to turn," said Mr. Toueg, who expects his business to be
steady this year after falling about 40% last year.

Still, competition for most available jobs is fierce. The number of
job seekers for each opening declined slightly in September, but still
stood at about six -- more than double the 10-year average.

The competition is evident at Country Crossing, a new 375-acre
entertainment venue in Dothan, Ala., that is hiring 600 people to staff
its three restaurants, RV park and other facilities. A recent three-day
job fair to hire 100 restaurant workers drew about 3,000 applicants.

"You'd even be surprised at the ages: all the way from 16 to, gosh,
75 years old," said Doug Rainer, director of communications for Country
Crossing.

Write to Mark Whitehouse at mark.whitehouse@wsj.com and Sara Murray at sara.murray@wsj.com