Job Demand Stabilizes

Posted by: Joe Weber on June 30

help-wanted.jpg Despite a setback in June, employer demand for new employees seems to have stabilized after the freefall of last year, analysts at the Conference Board report. Online advertised vacancies shrank 71,000 in the five months since January – most of that coming in June. This is a sharp contrast with the 1.2 million decline in the five months from last August to January.

“We are not out of the woods yet, but job demand has definitely stabilized since January,” Gad Levanon, senior economist at the Conference Board, says in the June 29 report. “Although there is some bounce in the monthly numbers, the number of online advertised vacancies has held steady in the last three months.”

June was hardly encouraging. Advertised job postings slipped 66,700 to 3,294,800 during the month. This trimmed overall gains for the past three months to 35,000.

The decline in June is echoed by slippage in consumer confidence after back to back gains in recent months. The Conference Board Consumer Confidence Index, which had improved considerably in May, retreated in June, the board reported on June 30. The Index now stands at 49.3 (1985=100), down from 54.8 in May. The Present Situation Index decreased to 24.8 from 29.7. The Expectations Index declined to 65.5 from 71.5 in May.

These numbers, based on a poll of 5,000 U.S. households, suggest continuing weakness — although board officials say conditions are nowhere near as dire as they were in prior months.

"The decline in the Present Situation Index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Looking ahead, expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth."

On the job front, meanwhile, employers are looking for more help in parts of the South and Midwest, while much of the rest of the country remains stagnant or down. Some 9,200 more jobs were advertised online in Florida in June than were in May, bringing the June tally up to 170,100 for the state. By contrast, vacancies slipped 15,900 in California, to 364,000. Other states with increases in ads for jobs included Georgia, North Carolina, Virginia, Illinois, Arizona and even hard-pressed Michigan, which was up about 800 spots, to 69,200.

“The June data shows an almost even split between the number of states with increases (24) and the number with declines (26),” says Levanon. “But there are clear signs that the employers are advertising again for workers and in some states the trend over the last few months has improved.”

The types of jobs showing declines may be surprising. Almost half the 66,700 monthly decline in June reflect decreases for positions in computer and mathematical science, a slide of 19,900 spots. Sales and related occupations similarly slipped 11,700, while some 10,400 fewer people were sought for health practitioners and technical slots.

For now, regrettably, unemployment rates nationwide are continuing to climb. Partly, this reflects a mismatch between the types of jobs workers are seeking and the kind available. There were more vacancies than unemployed people seeking positions for healthcare practitioners and in computer and mathematical science fields, for instance. By contrast, in sales and related occupations, about four people were seeking work in the field for every online advertised vacancy. Nearly five unemployed people were looking for work in office and administrative support spots for every opening.

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BusinessWeek’s Joe Weber, Patricia O'Connell, Michelle Conlin, Frederik Balfour, Peter Coy, Greg Spielberg and Roger Crockett examine The Case for Optimism by looking past the financial turmoil and economic unrest gripping the globe to focus on the promising future that lies on the other side of this storm. We’ll chronicle the forward thinkers investing in R&D, launching promising new products, entering new markets, or implementing management and leadership.

See why BusinessWeek Editor-In-Chief Stephen J. Adler is optimistic about the economy amid the sharpest downturn since the Great Depression.

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