By Lucia Mutikani

WASHINGTON (Reuters) - U.S. job openings increased in June and layoffs dropped to their lowest in nearly two years as labor market conditions tightened further, according a government report on Wednesday.

The Labor Department's monthly Job Openings and Labor Turnover Survey (JOLTS) report also suggested a growing skill shortage, which has been highlighted by independent surveys.

"This report continues to point to a tight labor market. It is clear that demand for labor is not the problem and there is nothing monetary policy can do to address a mismatch between the needs of employers and the skills of job seekers," said John Ryding, chief economist at RDQ Economics in New York.

Job openings, a measure of labor demand, rose 110,000 to a seasonally adjusted 5.6 million, the JOLTS report showed. That raised the jobs openings rate one-tenth of a percentage point to 3.8 percent.

The JOLTS report is one of the job market metrics on Federal Reserve Chair Janet Yellen's so-called dashboard. Fed officials view the labor market as being at or near full employment.

Concerns about persistently low inflation and an uncertain global economic outlook have left the U.S. central bank cautious about raising interest rates in the near term.

The economy created 547,000 jobs in June and July. The pace of job growth is, however, expected to slow as the economy's recovery from the 2007-2009 recession shows signs of aging.

Layoffs fell to 1.6 million in June, the lowest level since September 2014, from 1.7 million in May, the JOLTS report showed. The decline pushed the layoffs rate to 1.1 percent, the lowest since November 2013.

Hiring increased after three straight months of declines, suggesting employers are probably not finding qualified workers for the open positions. Hiring rose to 5.1 million from 5.0 million in May. The hiring rate climbed to 3.6 percent in June from 3.5 percent the prior month.

Job openings rose across nearly all sectors of the economy, with strong gains in manufacturing and construction, pointing to some stabilization in labor demand.

The industrial sector has been hurt by the combination of a strong dollar and lower oil prices, which have weighed on manufacturing and mining activities.

Other details of the JOLTS report showed Americans content to stay in their current jobs, with the quits rate, which the Fed looks at as a measure of confidence in the jobs market, holding at 2.0 percent for a third straight month in June.

"With labor market turnover stable and demand rising, further gains in employment should drive a modest improvement in wage growth and better rates of household income growth," said Jesse Hurwitz, an economist at Barclays in New York.

(Reporting By Lucia Mutikani; Editing by Chris Reese)