Unemployed workers may have a better shot at being hired this year now that the economic recovery appears to have begun. But don’t get too excited: Economists say the growth of jobs will be modest and more people will be competing for them.
For every available job in November, there were nearly 6.4 unemployed workers, according to the Labor Department in its latest Job Openings and Labor Turnover survey. By contrast, 1.7 people were out of work for each job opening in December 2007, when the recession began.
“The recession probably ended in July or August, but we haven’t actually turned the corner where things are getting better,” says Heidi Shierholz, a labor economist with the Economic Policy Institute in Washington.
That is particularly true when it comes to hiring. Except for adding a few thousand jobs in November, employers have collectively cut payrolls every month for the past two years.
“It’s getting worse at a slower rate than it was,” Shierholz says, “but it’s still getting worse. We expect the unemployment rate to hit 10.5 to 11 percent by the end of summer or early fall, then it will start to come down and we’ll turn the corner. But it’s going to take a very long time, at least five years, to get back to pre-recession rates of unemployment.”
For the next few months, mob scenes of jobless workers flooding local job fairs are not likely to subside. Sophia Koropeckyj, an economist with Moody’s Economy.com, says several constraints left over from the recession, including banks’ unwillingness to extend credit to smaller and midsize business owners, “will keep hiring from taking off” at least until the second half of this year.
She also says that businesses are afraid to take on additional payroll expenses right away because of uncertainty about the strength and sustainability of the economic recovery.
Hiring Freezes Are Thawing
But Towers Watson, a human resources consulting firm, found that employers’ attitudes were softening. In October, the firm surveyed executives at 201 U.S. companies, and 49 percent said they planned to reverse hiring freezes by April.
The Obama administration has also said millions of jobs would be created or saved this year through government spending on infrastructure and green industries, as well as incentives such as tax credits for businesses to expand and hire.
Even so, a full-fledged labor market recovery could take years now that 7.2 million jobs have vanished from U.S. payrolls—some permanently—since the recession took hold, according to the Labor Department.
Economists predict that the number of jobs lost since the recession began will eventually reach 8 million, and the unemployment rate should stay in the double digits at least until this summer.
Where the Jobs Are
Which industries will be the first to start hiring? According to Melanie Holmes, a vice president at the employment services company Manpower Inc., those fields likely to add the most workers in the first quarter of this year include:
Mining (oil and gas extraction, quarrying).
Durable goods manufacturing (computers and electronics, heavy appliances such as washing machines).
Information (publishing and motion picture industries, Internet service providers, television and radio broadcast).
Holmes says the list was based on a survey of 28,000 employers that were asked only about their hiring intentions for the first three months of 2010. Slight job growth was predicted among employers in nondurable goods manufacturing (such as food and clothing), transportation and utilities, education, and health services.
Moody’s Koropeckyj has a different take on the jobs outlook. She says that hiring will continue to accelerate in the health care industry, one of the few fields that added jobs during the recession (about 630,000, according to the Labor Department). Home health aides, administrative staff in hospitals and physicians’ offices, nurses and other staff will be in demand.