Labor Demand in the United States continued to grow in April.
In the last 4 weeks, 1.35 million new job ads were posted on paid-for online job boards. This includes 158,000 postings on CareerBuilder, 157,000 on Monster, 64,000 on HotJobs, and 71,000 job ads on Dice, an IT specialized job board.
There were 37,000 more online job ads posted in April compared to March. Considering the data collected so far for May, those monthly gains have remained stable at 33,000 new online job ads.
This growth comes after a solid first part of 2010 in terms of labor demand. The US was finally able to start generating gains in employment, even if we remove temporary hiring at the Census Bureau.
Compared to January, even the number of new Unemployment Insurance Claims fell from 490,000/week to around 450,000.
However, recent growth in Hiring Demand has decelerated a bit, although it remains positive in absolute terms. April did see an increase of 37,000 online job ads – but we had seen gains of 100,000 for March, 130,000 for February, and 143,000 for January. Even the number of new UI claims showed weakness last week, rising by 25,000 new claimants.
Wall Street has also noticed this deceleration. The S&P 500 is still up 19% compared to last year, but it has fallen 12.4% in the past month.
Hiring Demand tracks S&P 500 stock price returns quite well. The correlation between the two over the past three years has been 0.70. In other words, 70% of the variation in S&P 500 index returns can be explained by changes in Hiring Demand. The following graph shows that yearly gains in stock prices and labor demand have receded somewhat, after showing strong acceleration following the long decline into recession. Both lines are above the 0% line, marking year-over-year growth, but both of them have shown weakening in the past two months.