With the U.S. unemployment rate now at the 25 year high of 9.4%, some in the media have suggested it is good news that the rate of job loss is slowing. While there may be a glitter of hope in the lower number of job loss filings, the fact is job openings must improve in order to start absorbing the unemployed. The question is when will corporations start hiring more and where. The U.S. unemployment rate will not improve until job openings increase.
We have reported that job openings fell dramatically from January 2009 to March 14, 2009(See: Job Openings Drop Nationwide in first 45 Days of Obama). Job openings continued to drop but at a slower rate.
Best and Worst States analysis shows that job openings on careerbuilder.com have dropped 10.6% from Jan 29 to May 31 2009. Job openings less than 30 days old decreased to 210,048 as of May 31, 2009 from 235,059 as of January 29, 2009. More importantly, job openings dropped further since March 14, 2009 when we last reported. Job losses dropped 1.4% from 213,077 to 210,048. One might cheer at only a 1.4% loss in 45 days but if your portfolio declined about 1% per month you should consider this alarming. We are still losing job openings at the alarming rate of 1% per month. This is not what recoveries are built upon.
More importantly, all 10 of the biggest states have seen job opening drops since January. These 10 states represented 54% of all the open jobs on Career Builder in May. These states have seen a drop in openings of 12.25% since January, larger than the country average. Illinois was the Worst State for Job Openings with a decline of 20.4%. California at 16.6% decline was the second Worst State for Job Openings. New York at minus 14.3%, New Jersey at minus 13.2% and Pennsylvania at minus 10.6% job opening loss round out the 5 Worst States for Job Openings.
8 States showed improvement in job openings since January. These states showed small job increases. The Best State for Job Opening Improvement was South Carolina. Its job openings increased by only 237 or 7.6%. Kentucky at 134 and Indiana at 133 were the only other states that saw job openings improve by greater than 100.
Here is the listing of Job Openings by State for May 31,2009 as compared to Jan 31, 2009.
Source: Best and Worst States and CareerBuilder.com
Finally, the recent drop is all the more alarming as there has been a headwindof positive stimulus. The U.S. American Recovery and Reinvestment Actwas signed into law on February 14, 2009 about one month prior to ourlast measurement. March was also the bottom of the stock market dropwith a strong rally of 25.6% in the Dow from March to May. Onewould expect improvement in view of the great wealth effect of thestock market and the government stimulus. We will update more fully job changes since March when the stock market began to recover in an upcoming post. Signs of encouragement for job openings are not yet strong.