Online Labor Demand Rises To Pre-Recession Levels As Labor Market Slows
NEW YORK -- The unemployment rate remains high, but online demand for workers has reached levels not seen since before the recession, according to a new report.
Online labor demand, as measured by help-wanted advertisements posted on the Internet, rose in May by 148,800 listings to a high of 4.5 million advertised vacancies. That number hasn't been reached since May 2005, according to the Conference Board, a global independent business membership and research association. The findings mean that as of April, for every three workers out of a job, there is one advertised vacancy.
That stands in contrast to the Bureau of Labor Statistics' latest ratio, which showed approximately four unemployed workers for every opening in March.
"Overall, the trend in online advertised vacancies has been positive this year," said June Shelp, Vice President at the Conference Board and author of the report.
But economists, including Shelp, caution to take the Conference Board's numbers with a grain of salt. The caveat, Shelp said, is that "while we have now returned to the pre-recession levels of labor demand, the big difference today is the larger number of unemployed workers that are seeking jobs compared to four years ago."
Positions advertised online are not a guarantee of employment, and vacancies can take months to fill. Plus, a given vacancy might not be filled by an unemployed worker. In fact, studies show that the long-term unemployed have more difficulty finding work than those already working.
In May, there were 13.7 million Americans officially out of work, with 5.8 million of them out of a job for 27 weeks or more. And while an increase in the number of advertised positions is a good sign that employers are contemplating expanding their workforce, the number isn't steep enough to dig the U.S. labor market out of the deep hole the Great Recession created.
Many who closely follow the ups and downs of American joblessness are concerned that the job market could be heading for an even greater slowdown in hiring.
A new report from Goldman Sachs' research division points to the most unsettling signs: weak private sector payroll growth, a steep drop in manufacturing growth -- the improvement of which had been a key feature of the post-recession uptick -- and consumer confidence sagging to a six-month low.
In addition, weekly jobless claims fell less than expected in the last week of May. The picture, as the Goldman Sachs report put it, is "quite concerning."
On Friday, the Bureau of Labor Statistics will release its monthly unemployment snapshot. Many economists are downgrading their expectations.
"We've had three or four months that have been quite good by recent experiences. Not great, but good," said Harry Holzer, Georgetown public policy professor and former chief economist at the U.S. Department of Labor. The last several months have averaged around 200,000 new jobs a month. Holzer says 125,000 jobs must be added each month for the labor market to just tread water.
"You never put too much weight on a single month," Holzer said. "But the fear -- if there is a dip tomorrow -- is that it could be a preliminary signal of a longer slowdown. There's a wide range of evidence that suggests if we do see a slowdown tomorrow, it will last longer than a month."
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First Posted: 06/02/11 05:22 PM ET Updated: 08/02/11 06:12 AM ET