Job Openings and New Hires Fall

By KELLY EVANS The labor market is showing tentative signs of improvement, but reports released Tuesday suggest competition for jobs remains fierce as companies large and small are wary of adding positions. The level of layoffs and discharges in the U.S. improved to a seasonally adjusted 2.12 million in October from 2.13 million the prior month, the Labor Department said Tuesday. But job openings and hirings both contracted, leaving fewer prospects for the nation's unemployed. Meanwhile, separate surveys showed small businesses planned to hire fewer workers in November and the nation's largest companies foresaw only a slight gain in hiring over the next six months. "We're continuing to see a pattern of fewer layoffs but no hiring," said David Resler, chief economist at Nomura Securities. He attributed the paralysis to uncertainty plaguing businesses on issues ranging from the economy to the health-care overhaul. "We're close to a turn on the hiring front but still are being held back by a very cautious environment," Mr. Resler said. The Labor Department's report showed the number of U.S. job openings shrank to a seasonally adjusted 2.5 million in October from about 2.6 million the prior month, while the number of hires dropped to 3.9 million, falling below the four million mark for the first time since June. A gauge of worker confidence -- the quits rate -- also fell. The U.S. unemployment rate, which hit 10.2% in October, dipped to 10% last month and the level of job openings and hirings may show a similar improvement in November. But labor-market conditions remain depressed: the ratio of the nation's 15.7 million unemployed to the number of job openings in October was more than six to one. Meanwhile, a separate Labor Department report released Tuesday showed the full impact of labor-market weakness in the U.S. The proportion of workers doing full-time, year-round work fell to 65.6% last year from 68.4% in 2007 and the number of people who at some point experienced unemployment leapt to 21.2 million from 15.1 million. Small-business optimism sank in November, an index produced by the National Federation of Independent Business showed Tuesday, falling nearly a point from October to a reading of 88.3. Respondents cited very weak consumer spending as a major worry as well as uncertainty about taxes, higher energy costs, changes to the health-care system and the federal deficit. "The 'turbulence' created when Congress is in session is often debilitating," the report said, "this year being one of the worst." The job-creation component of the index fell two points to minus-3%, and the report noted "the 'job generating machine' is still in reverse." Similar hesitance was seen in a survey released Tuesday by the Business Roundtable, an association of chief executive officers. The association said its outlook index, a measure of CEOs' views on business conditions, brightened in the fourth quarter to 71.5 from 44.9 the prior quarter, but hiring plans remained weak. Only 19% of the 111 CEOs surveyed said they expected their payrolls to increase over the next six months, while 31% expected a decrease. —Deborah Lynn Blumberg contributed to this article. Write to Kelly Evans at kelly.evans@wsj.com