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 5 million or over 2 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.
REGIONAL/STATE HIGHLIGHTS
* Losses are widespread across the regions and States
* The gap between labor supply and demand continues to widen in most States
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).
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 S/D rate at 4.75, indicating that there are about 5 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 3 unemployed individuals for each available online job posting. It should be noted that the S/D 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 .
OCCUPATIONAL HIGHLIGHTS
* Shortages of advertised vacancies for many of the unemployed
* Shortages of qualified individuals for higher paying jobs
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% of the overall online demand. While these occupations make up the larger portion of online demand, they only account for 20% of the unemployed.
The medium/lower paying occupations make up the remaining 40% of online demand but represent 80% of the unemployed - this means that there are far fewer available online ads for most of the unemployed.
The overall national S/D rate is 2.02 indicating, on average, 2 unemployed workers for each advertised vacancy; however, looking at the S/D rates for the more detailed occupations, a different picture emerges in terms of the ability to place the unemployed into the advertised jobs.
The high-demand, high-paying occupations have low S/D rates. For Computer and Math occupations (S/D=0.13) there are over 7 advertised vacancies for every unemployed individual and for Healthcare Practitioners/Technical (S/D=0.23) there are over 4 ads for every unemployed individual. On the other hand, the S/D rates for the medium/lower paying occupations generally have high S/D rates. In the Production category (S/D= 5.80) and Food Preparation (S/D= 6.45) there are 6 unemployed individuals for every ad; correspondingly, in the Transportation category (S/D= 4.84) there are about 5 unemployed workers for every advertised vacancy.
"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.
METRO AREA HIGHLIGHTS
* 35 of top 52 Metro areas post over-the-year declines in job demand
* Washington, DC makes all three top ten lists (total ads, ads rate and supply/demand rate)
In September, 35 of the 52 metropolitan areas for which data is reported separately posted a decline in the number of online advertised vacancies from last September. The New York metro area continued to post the largest number of advertised vacancies (273,000).
Among the top 10 metro areas with the largest number of online advertised vacancies, only Washington, DC (165,200 online ads) also made the top 10 list for highest number of ads per 100 persons in the local labor force (an ads rate of 5.41) and the top 10 list for most favorable S/D rate. Advertised vacancies exceeded the number of unemployed persons looking for work in Washington, DC, as well as Salt Lake City, Austin, Milwaukee, Oklahoma City, Seattle-Tacoma and Boston.
