Online advertised vacancies fell 108,700 in August to 4,684,800, according to The Conference Board Help Wanted OnLine (HWOL) Data Series released today. The combined July and August losses of 262,000 bring HWOL basically back in line with the May 2012 level. The Supply/Demand rate stands at 2.7 unemployed for every vacancy. In July, the number of unemployed was 8 million above the number of advertised vacancies, down from 10 million in the fall of 2011.
“So far, 2012 is shaping up to be a very slow-growth recovery for labor demand,” said June Shelp, Vice President at The Conference Board. “August is a month when we normally expect to see employers gear up for the fall, but this year, labor demand was disappointingly below seasonal expectations.” On the positive side, the U.S. has an average monthly increase of 45,000, and 45 of the 50 States are still showing gains for the year.
REGIONAL AND STATE HIGHLIGHTS
- Labor demand falls in 18 of the 20 largest States in August
Changes for the Month of August
In August, online labor demand declined in 42 of the 50 States in the U.S. (Table 3). States that posted increases included Mississippi (+1,100), Texas (+900), Alaska (+800), North Dakota (+400), Montana (+300), West Virginia (+300), Delaware (+200), and North Carolina (+100). (For details of each State see Table 3.)
Online labor demand in the Northeast fell 44,800 in August. Pennsylvania declined 11,700 for a cumulative gain of 4,400, or 2.5 percent, so far this year. New York fell 11,300 in August for a cumulative gain of 22,600, or 8.9 percent, in 2012. Massachusetts fell 4,100 for a cumulative gain of 12,900, or 10.1 percent, in 2012. New Jersey dropped 1,400 for a cumulative gain of 10,100, or 7.1 percent, this year. Among the smaller States in the Northeast, August labor demand decreased by 800 in Rhode Island , 600 in Connecticut, 500 in New Hampshire, and 300 in Maine (Table 3).
In the West online labor demand fell 35,800 in August. California, the largest State, dropped 13,300 in August but was up 51,500, or 11.1 percent, in the first eight months of 2012. Washington dropped 6,300 in August and was up 7,800, or 7.5 percent, so far this year. Colorado fell 4,700 for a cumulative 2012 gain of 12,100, or 14.2 percent. Arizona dropped 4,300 for a cumulative gain of 6,900, or 8.7 percent. Among the smaller States, in August, Nevada decreased by 2,600, Oregon dropped 1,600, and Utah fell 1,000 (Table 3).
Online labor demand in the Midwest dropped 29,000 in August. Ohio experienced the largest decline, 4,700, while Wisconsin posted a drop of 4,600. The August decline in Ohio brought the eight-month total for 2012 to a gain of 13,400, or 7.9 percent. Wisconsin’s cumulative gain was just 800, or 0.9 percent. Illinois was down 4,400 in August for a year-to-date gain of 19,700, or 12.4 percent. Michigan fell 3,200 for a cumulative gain of 12,300, or 9.9 percent. Minnesota was down 2,400 for a 2012 gain of 11,900, or 10.9 percent. Missouri dropped 400 for a cumulative gain of 3,100, or 3.6 percent. Among the smaller Midwest States, in August Indiana lost 1,700, Kansas dropped 1,400, South Dakota lost 300, and North Dakota gained 400.
Online labor demand in the South fell 12,900 in August (Table A) with Texas and North Carolina posting slight increases (900 and 100 respectively). Texas’s cumulative 2012 increase was 45,900, or 14.9 percent; North Carolina’s was 14,100, or 12.0 percent. Maryland dropped 3,800 in August for a year-to-date gain of 9,500, or 9.2 percent. Georgia lost 3,100 for an eight-month increase of 9,500, or 8.1 percent. Virginia dropped 800 for a cumulative increase of 18,100, or 13.3 percent. Florida lost a mere 100 for a cumulative gain of 23,400, or 9.7 percent. In August among the smaller States, Tennessee fell 600, South Carolina lost 300, and Arkansas and Louisiana both fell 100.
The Supply/Demand rate for the U.S. in July (the latest month for which the national unemployment number is available) stands at 2.67, indicating that there are between 2 and 3 unemployed workers for every online advertised vacancy. Nationally, there are 8 million more unemployed workers than advertised vacancies.
The Supply/Demand rates for the States are also for July 2012, the latest month available for unemployment data. The number of advertised vacancies exceeded the number of unemployed only in North Dakota, where the Supply/Demand rate was 0.68. The State with the highest Supply/Demand rate is Mississippi (5.57), where there were between five and six unemployed workers for every online advertised vacancy. Note that the Supply/Demand rate only provides a measure of relative tightness of the individual State labor markets and does not suggest that the occupations of the unemployed directly align with the occupations of the advertised vacancies (see Occupational Highlights section).
Performance of States in 2012
Although labor demand was less than seasonally expected in July and August, eighteen States posted gains of 10 percent or more since December 2011. “The gains, while modest, indicate that employers are continuing to look for workers to replace staff members that have left and to hire additional staff,” said Shelp. These eighteen States are spread across the U.S. The Midwest and the West had the largest numbers of States, with six States in the Midwest (Nebraska, Kansas, Illinois, Minnesota, Indiana, and Michigan) and six in the West (Hawaii, Colorado, Alaska, Nevada, California, and Utah) with gains at or above 10 percent. The five States in the South that had increases of 10 percent or more included Oklahoma, Texas, Virginia, North Carolina, and Florida. In the Northeast only one State made the list—Massachusetts.
METRO AREA HIGHLIGHTS
- In August the largest metro areas posted drops in labor demand
- 8 of the 20 largest metro areas have supply/demand rates below 2, indicating that there are fewer than two unemployed workers for every online advertised vacancy
In August, all of the largest MSAs and a total of 47 of the 52 metropolitan areas for which data are reported separately posted drops in the number of advertised vacancies (Table 5).
A number of the largest metro areas have shown strength in online advertised vacancies since the official end of the recession in June 2009. Ten have posted increases of at least 100 percent: Minneapolis-St. Paul (up 141%), Detroit (up 139%), Cleveland (up 129%), Milwaukee (up 117%), Nashville (up 117%), Columbus (up 114%), San Jose (up 107%), Indianapolis (up 107%), Charlotte (up 105%), and Louisville (up 100%).
Seventeen MSAs had Supply/Demand rates in July 2012 (the latest available data for unemployment) lower than 2, indicating there are fewer than two unemployed for every advertised vacancy (See Table 6). Washington, DC continues to have the most favorable Supply/Demand rate (1.03) with essentially one advertised vacancy for every unemployed worker. Oklahoma City (1.13), Minneapolis-St. Paul (1.17), Boston (1.21), Salt Lake City (1.46), and Columbus (1.47) had the next lowest Supply/Demand rates.
Metro areas in which the number of unemployed is substantially above the number of online advertised vacancies include Riverside, CA with over 7 unemployed workers for every advertised vacancy (7.59); Sacramento (4.09); Miami (3.68); Los Angeles (3.62); and Las Vegas (3.60). Supply/Demand rate data are for July 2012, the latest month for which unemployment data for local areas are available (Table B & Table 6).
- 5 of the 22 major occupational groups in the Standard Occupational Classifications (SOC) posted gains while 17 declined (Table C and Table 7)
- Among the top 10 occupations for labor demand, Healthcare practitioners and technical occupations experienced the only increase, +16,300
Occupational Changes for the Month of August
Among the largest occupational groups, Healthcare Practitioners and Technicaloccupations were the only ones that experienced an increase in August. Demand rose 16,300 to 606,900 (Table C) and was led by an increase in demand for Registered Nurses, Occupational and Physical Therapists, Pharmacy Technicians, and Speech Pathologists.
Sales and Related occupations experienced by far the largest August drop, 36,600, to 630,000 followed by Computer and Mathematical Science, down 26,800 to 602,600. In the Sales category the drop was led by a decrease in demand for Retail Sales Workers, Wholesale and Manufacturing Sales Representatives, and Financial Services Sales Agents.Management occupations also fell 11,200 to 456,200, largely reflecting a decline for Sales Managers.
Other categories with declines in labor demand included Food Preparation and Serving Related, down 17,000 to 176,000; and Office and Administrative Support, which was down 11,300 to 492,700, reflecting lower demand for Stock Clerks, Order Clerks, and Interviewers.
A Stark Contrast—Professional versus Services/Production-Related Occupations
By dividing the HWOL occupational data into two broad categories—Professional occupations and Service/Production occupations—the contrast between the two is quite glaring both in terms of labor supply (i.e. unemployed) and labor demand (i.e., ads) as well as wages. While the differences in wages and educational requirements have been well-documented, a critical issue is the stark differences in the Supply/Demand rates between the two groups where there is an under-supply of labor relative to the demand in most of the Professional occupations and a large over-supply of labor in the Services/Production occupations.
First, a bit of background: using the Federal government's Standard Occupational Classification (SOC) system codes, the Professional category is represented by SOC codes 11 through 29. The Services/Production-Related category is represented by SOC codes 31 through 53. (See Table 7, page 17 for the occupations in each category; for each of these occupations, Table 7 contains counts of the current online ads, unemployment, and the current average wage.)
Unemployment and Supply/Demand The national Supply/Demand rate of 2.7 (about 2.7 unemployed for each available ad) masks a deeper problem between the two occupational categories. While the number of advertised vacancies for the two groups are close to 50/50, the number of unemployed seeking these jobs are not. About 80 percent of the officially unemployed are in the Service/Production occupations while only 20% of the officially unemployed are in the Professional occupations. However, labor demand is split about 50/50 with demand for Professionals making up 53 percent of the ads while demand for Services/Production is at 47% of ads. Stated another way, Professional occupations as a group has an S/D rate of 1.0 (i.e. one unemployed worker for each ad) with many of the occupations showing a clear shortage of available workers while the S/D rate for the Services/Production occupations is at 4.0 (i.e. four unemployed for each ad) with a number of the individual occupations having a much higher rate.
“Based on the numbers alone, looking for work is a starkly different experience for the two groups and much easier for the unemployed in the professional category,” said Shelp.
Wages and Education As expected, wages and education are quite different in these two occupational groups. Based on the federal government’s average hourly wage data, the Professional occupations show average wages well above $20.00 per hour, ranging from $51 per hour for management to a low of $21 per hour for community and service occupations. The Service/Production occupations, on the other hand, average well less than $20 per hour, ranging from $21 for construction to $13 for health care support occupations. Correspondingly, many of the Professional occupations have a Bachelor’s or Associate’s degree requirement while the Services/Production Related occupations generally range from a "less than high school" to "some college" educational requirement.
“Some of the more difficult challenges facing the economic recovery (and the unemployed) are finding alternative job opportunities for roughly one third of the unemployed that are in four Service/Production occupations,” said Shelp. In spite of any recent gains, occupations where there are significant job challenges include the following:
- Construction (SOC 47) with 1,263,000 unemployed and an S/D rate of 14.5
- Building/grounds maintenance (SOC 37) with 766,000 unemployed and an S/D rate of 10.4
- Production (SOC 51) with 899,000 and an S/D rate of 6.2
- Transportation (SOC 53) with 1,030,000 unemployed and an S/D rate of 4.4.
While there will be some cross-over opportunities from these occupations to the more readily-available jobs in the Professional category, in many cases the educational gap will prove to be too great. This will continue to leave many of the unemployed in a very challenging job-search environment with very few openings and a large number of job-seekers.
A Look at labor demand in Construction occupations
Construction (SOC 47) labor demand, which rose 1,500 in August to 88,300, has increased 7,100 this year. The 2012 increase has been a modest 8.8 percent. (See Chart 3)
The number of unemployed is just over 14 for every advertised vacancy, based on July data, which is the latest available data for unemployment. “For unemployed workers in construction, finding jobs may still be a challenge, but the situation is substantially better than the over 50 unemployed for every online advertised vacancy in October 2009,” said Shelp.