US Job Market turns South loses 2.0% in June 2011

Online advertised demand for labor in the US fell 2.0% in June, the first decline since December. After a good start at the beginning of this year the job market is slowing now leaving little hope for more activity during the summer. This development is worse than a year ago when the job market leveled of during the same time. The difference is that growth rates last year, while small, remained positive.

United States Job Openings, January 2007 - June 2011

The current drop did not come entirely unexpected. Over the past several months, growth rates were declining suggesting a flat summer season. With the development in June one can only hope that demand in July will stabilize and not further deteriorate.

Comment by David Kimmelman on July 6, 2011 at 10:13am: I think this is a dangerous message and not altogether accurate if this is just based on paid job postings. I know for a fact that before I pay for postings I get my entire company invested in the job search for open positions of which we have several and use LinkedIn to work some magic before spending unnecessary money on job boards.

It would not shock me if many companies are doing similar. I could be wrong, but saying the job market has turned south by 2% is to me somewhat irresponsible and untrue, in my humble opinion.

Comment by Henning Seip on July 6, 2011 at 11:33am: David, when the numbers clearly point downward would you sugarcoat the situation and tell everyone, it's not as bad as it looks? Based on what I see the job market is not doing well at all.

Comment by pam claughton on July 6, 2011 at 12:17pm: I agree with David. I think it's a stretch to state that the job market has turned south by 2% just because you're not seeing as many paid postings. Not sure what part of the country you are in Henning, but we are having our best year yet, our clients are giving us multiple searches to work on and business is booming. As an fyi, they don't have all of these jobs posted.

Comment by Henning Seip on July 6, 2011 at 12:33pm: Pam, when I say "turns South" I mean that the job market turns a corner. I don't mean this as a trend. Labor demand at the US level is an indicator providing a short term view where things are going. You cannot translate this into a single company situation. Some employers are ramping up job openings while others have declining demand. The chart is the balance of all signals we get from the job market.

Comment by pam claughton on July 6, 2011 at 12:56pm: I just don't think your chart accurately reflects the whole market. I'm not a fan of sweeping negative generalizations like this though or statements like "job market is slowing leaving little hope for more activity during the Summer". How can you back up a statement like that? What is it based on? It seems overly negative to me. Just my opinion though, and as I mentioned, it does not reflect what I am seeing out there at all.

Comment by David Kimmelman on July 6, 2011 at 1:29pm: Henning, There is so much negativity around the US about how the job market is not moving forward fast enough and no one is commenting or posting about the positive of side of the job market and where the jobs are. There are tons of job opportunities out there for people who want to find them and invest the time and effort into finding them, but I personally feel that most of the negativity has been politically motivated in order to get President Obama out of office. I am not accusing you of that by any stretch, but it's about time the media and other entities tried accentuating the positives, versus just promulgating the negative.

Comment by Henning Seip on July 6, 2011 at 2:21pm: David, I hear you. As an analyst it is always difficult to strike a balance of tone. I interpret the job posting numbers as an employer confidence indicator whether they are planning to hire more or fewer people in the near term. Some of it is cyclical. This summer seems to be worse than last summer. After all we are in an economic recovery where you typically do not see drops in labor demand.

When you put a trend line through the chart beginning in 2009 you have a clear movement pointing upward. That is certainly positive and I firmly believe that this trend will continue. On the other side how many people are cautious with their spending since they are in debt or fear unemployment. On top of this everything costs more due to recent higher energy prices. Since the US is a consumer economy, consumer spending has a direct impact on jobs. Unfortunately, being optimistic is not good enough.

Comment by Henning Seip on July 7, 2011 at 9:10am: ADP published its monthly employment report this morning. According to the report, US payroll grew by 157,000 jobs in June. http://www.adpemploymentreport.com/

Comment by Henning Seip on July 8, 2011 at 8:58am: BLS reports US payroll for June: "Nonfarm payroll employment was essentially unchanged in June (+18,000), and the unemployment rate was little changed at 9.2 percent. Employment in most major private-sector industries changed little over the month. Government employment continued to trend down."

www.bls.gov

Comment by Henning Seip on July 12, 2011 at 8:33am: CNBC reports: Economists Finally Admit: We're Clueless About Jobs, Too. http://www.cnbc.com/id/43711926

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