Job openings stay flat in May
Unemployed electrical engineer William Love of Pasadena, Md., whose unemployment benefi ts have
been exhausted, fi lls out an application for a sales position at a job fair in Linthicum, Md. The number of
job postings didn’t increase in May, a sign that hiring is unlikely to pick up this summer.
It’s shaping up to be a long, tough summer for job seekers: The number of job postings didn’t increase in May, the latest sign that hiring is unlikely to pick up anytime soon.
Employers advertised nearly 3 million job openings, the Labor Department said Tuesday. That is the same amount as in April and down from 3.1 million in March.
May’s figure is higher than the 2.1 million job openings posted in July 2009, one month after the recession ended and the lowest total since the government began recording the data a decade ago. But it also is significantly below the 4.4 million openings recorded in December 2007, when the recession began.
There’s heavy competition for each opening. In May, nearly 14 million people were out of work. So, roughly 4.7 unemployed people, on average, competed for each available job. In a healthy economy, the ratio is about 2 to 1.
The report, known as the Job Openings and Labor Turnover survey, doesn’t include temporary or contract positions.
June was likely an even worse month for job openings. The Conference Board, a business-research group, has said that online job postings dropped last month to 4.4 million. And SimplyHired.com, the world’s largest job-search engine, said last week that online postings fell in June for the second-straight month.
Companies can take anywhere from one to three months to fill a job opening. The reports suggest a weak stretch of hiring this spring may extend into the summer.
“Employers are less confident in the economy right now,” said Gautam Godhwani, CEO of SimplyHired.com. “We’re starting to see some softness, and I would expect that to continue.”
The economy generated only 18,000 net jobs in June, and the unemployment rate rose to 9.2 percent, the government said last week. That followed an abysmal showing in May, when employers added only 25,000 jobs.
Companies have pulled back sharply on hiring after adding an average of 215,000 jobs per month from February through April. The economy typically needs to add 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.
Layoffs rose in May, too. Nearly 1.8 million people were laid off or fired in May, the most in nine months, the Labor Department report said.
Economists had expected the economy to improve after overcoming several temporary factors. High gas prices left consumers with less money to spend on other items. And Japan’s March 11 earthquake and tsunami disrupted supply chains in the auto and electronics industries, which slowed U.S. factory production.
Federal Reserve Chairman Ben Bernanke acknowledged last month that the impact of the weak housing market and tighter credit might be “more persistent than we thought.” The Fed lowered its forecast for growth this year to about 2.8 percent, down from an earlier estimate of 3.2 percent. And it expects unemployment won’t fall below 8.6 percent by the end of the year.