Nation’s unemployment rate remained steady at 9.6% and the number of unemployed workers remained mostly unchanged at about 15 million in September. Overall nonfarm payroll employment edged down (-95,000) as employment shrunk in the public sector (-159,100) due to unexpected loss of state and local government jobs and expected reduction of temporary census workers. However, private-sector employment continues to trend up modestly (+64,000). Jobs have grown in healthcare, temporary help services, food services and mining, while manufacturing stabilized and construction experienced slight downturn as end of summer approaches.
While modest growth in the private sector jobs for the past few months have been stabilizing, hiring growth still remains anemic relative to the required pace to re-employ all those displaced workers and absorb new entrants in the marketplace. So, the question remains – when will companies begin hiring? U.S. companies are experiencing record profits but they have been holding off hiring by rationalizing uncertain economic outlook. Instead of hiring new employees, many companies are purchasing their own stock back to make their balance sheets look better.
A recent paper by Steven Davis of Chicago Booth School of Business, R. Jason Faberman of the Philadelphia Fed and John Haltiwanger of the University of Maryland shows that companies aren’t trying hard enough to fill vacancies and their “recruiting intensity” remains low. But this can’t continue for long. As corporations continue to grow profits, Wall Street will shortly demand top line growth and companies will be forced to extend product lines, expand markets, increase research and open production facilities. Only then will there be job creation. The slow but steady stabilization of employment in the private sector is encouraging and probably a prelude to an impending acceleration of hiring.
At America’s Job Exchange we continue to see modest to accelerated growth in new job postings. We believe that employment pace will accelerate soon and gain steam during the January/February timeframe. Our belief in hiring recovery has prompted us to invest heavily in a total re-architecture and launch of a new and improved job search site with modern search technologies and recruiting trends. The site is slated to launch in January – just in time to meet the demands of the hectic pace of hiring in 2011.