Online Job Demand Drops 216,000 in Sept., The Conference Board reports

Online advertised vacancies fell by a seasonally adjusted 216,000 in September to 4,418,000 with widespread losses across the regions and the States, according to The Conference Board's Help-Wanted Online Data Series (HWOL)™ released on October 1. The September losses continued a downward trend which started in May 2007.

"All in all, indications are that employment will deteriorate even more rapidly in the near term," noted Gad Levanon, senior economist at The Conference Board. "The current HWOL data indicates that labor demand was down in September even before the tumultuous events in the financial sector during the end of the month."

There is a close correlation between employers' labor demand and unemployment. "As demand drops, unemployment will rise as it becomes more difficult for the unemployed to find jobs," Levanon noted. Since May 2007, the gap between the unemployed and advertised jobs has significantly widened and now stands at almost five million or over two unemployed workers for each advertised opening.

The direct effect of lower employer demand can also be seen in the payroll employment trends which turned lower in November 2007. Historically, labor demand has provided a leading indication of future employment trends.

Declines in labor demand across the four broad Census regions were about proportionately spread with greatest losses in absolute numbers occurring in the larger states, Texas (-30,300), California (-21,300), New York (-15,800) and Pennsylvania (-14,100). "However, all states do not exhibit the same longer term trend," said Levanon.

In the Northeast region, Massachusetts, New York and New Jersey all had losses in September but overall continued on a flat trend. "Looking at the movements over the last few months, job demand in these states is basically flat," Levanon noted. Pennsylvania experienced a more recent downward trend. Unlike the other States in the Northeast, Pennsylvania showed a positive upward trend until early 2008, but since then has begun to show losses.

In the South, Florida (-5,000) and Georgia (-3,800) continue on a downward trend while job demand in Maryland continues to be basically positive and unaffected by the slowdown. Texas experienced a loss in September but still the overall trend remains flat. North Carolina and Virginia are also flat in terms of labor demand.

In the Midwest region, Wisconsin, after a long positive growth trend, has recently turned negative. Both Michigan and Missouri continued with long term growth trends while Illinois, Minnesota and Ohio were down slightly in September but still basically flat.

In the West region, both Arizona and California continued their long term declines that began in mid-2007.

The overall drop in employer labor demand has lead to higher unemployment and a widening gap between the number of unemployed and advertised jobs in most States. Looking at the Supply/Demand rates for the larger States in the regions, Maryland has the lowest rate at 1.06 indicating that the number of unemployed basically equals the number of ads. Massachusetts, Virginia and Colorado also have relatively low rates with only small gaps between labor supply and labor demand.

On the high end, Michigan has the highest Supply/Demand rate at 4.75, indicating that there are about five unemployed individuals for every available ad and correspondingly, the gap between supply and demand is quite large. Ohio, Illinois and North Carolina also have high rates with approximately three unemployed individuals for each available online job posting. It should be noted that the Supply/Demand rates only provide a measure of relative tightness of the individual State labor markets and do not suggest that the occupations of the unemployed directly align with the occupations of the advertised vacancies.

The widening gap between advertised vacancies and people looking for work highlights the very different challenges in various occupations. Even with the slowdown in online advertised vacancies, there is still strong job demand for many of the higher paying occupations which make up 60 percent of the overall online demand. While these occupations make up the larger portion of online demand, they only account for 20 percent of the unemployed.

The medium/lower paying occupations make up the remaining 40 percent of online demand but represent 80 percent of the unemployed --this means that there are far fewer available online ads for most of the unemployed.

"In the U.S. job market, there are challenges both to supply an adequate number of trained individuals to fill the higher paying jobs and also to create sufficient employer demand or skills training programs for unemployed individuals in the medium/lower paying occupations," Levanon noted.

Reprinted with permission. © CCH

(Submitted Oct. 20, 2008)

Online Job Demand Drops 216,000 in Sept., The Conference Board reports Online advertised vacancies fell by a seasonally adjusted 216,000 in September to 4,418,000 with widespread losses across the regions and the States, according to The Conference Board's Help Wanted