US Job Market grows only 2.1% in May

It is getting slower out there. Over the past four months, growth rates of US job postings have been on a slide downwards with the latest addition in May of only 2.1%. Employers posted a daily average of 2,600,000 job openings (estimate) during the last 30 days, just 55,000 more than in April. Four of the five largest metro area posted gains. Employers in the New York Metro area added just 1.0% while the Los Angeles job market remained virtually unchanged (down 0.4%).

United States Job Openings, January 2007 - May 2011

If we interpret job postings as a short term outlook of employers on the economy the numbers suggest that employers are becoming increasingly cautious to look for additional labor. According to the BLS, the US economy added 768,000 jobs this year so far with April being the month of highest growth. It may be less exciting when the BLS publishes it's May employment report on Friday.

Comment by Henning Seip on June 3, 2011 at 11:13am: Suresh, I believe job postings can be a leading economic indicator but you have to count and interpret them the right way in order to produce a useful message.

Comment by Suresh on June 3, 2011 at 11:41am: Henning, these economists at Major banks are using the best available tools to project 160,000 jobs in May. I wonder if they actually use any data from Job Boards at all.

I understand job postings are actual hiring have some lag, but you must have looked into this. I can understand them being off by 10-20%, but this month they were off by 70% or so.

Comment by bill josephson on June 3, 2011 at 11:51am: They crunch assorted numbers and bake them into their formulas. Can't go by jobs postings cause many aren't real existing jobs, just an avenue to keep a steady stream of qualified candidates in the loop for a potential projected need in the future.

The corporate jobs sector in the US has been awful since 2001 with millions of fewer/lost jobs, millions created instead overseas with a greater US population. If government didn't continuously since Clinton in 1993 try to remove no longer counting people from the unemployment number statistically, stopped trying to guess bias factor jobs they think were created but can't find, didn't prognosticate businesses starting up, and honestly looked at jobs creation before subtracting jobs lost to see if we're really creating more jobs or we're just losing fewer jobs when they subtract we'd have accurate pictures.

But Gallup has our unemployment factored the old fashioned way at 19.2%. Who do you believe? I'll pick Gallup.

Comment by Henning Seip on June 3, 2011 at 11:59am: Suresh, predicting the monthly BLS employment number is hard. There are many pieces of information that you would need to consider. Job postings alone will not do the trick.

I interpret job postings as a short-term outlook of how employers see the world. Currently they feel people cannot buy more stuff because they spend it on gas and food (->increased cost of energy). Why should they produce more? If job postings are an indicator on how employers feel about their short term labor need then you can foresee whether there are more jobs or not in the future.

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