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Demand for Workers with Graduate Degrees Grew 1.5% During Recession

By Charles Thibault on March 4, 2010

The recession did not affect labor demand for workers that have at least a Master's degree, according to data from WANTED Analytics. In fact, the number of online job ads for workers with at least a Master's degree grew by 1.5% during the recession.

The number of online job ads is extracted from WANTED's Hiring Demand Dashboard which tracks job counts on over 1,000 US job boards.

Workers in occupations that typically require a Bachelor's degree were hit severely though: the recession cut their number of jobs by 37.5%.

The following graph shows the number of online job ads in the United States by education level, weekly, over the past 4 years. The graph tracks "new" online job postings (as opposed to job ads that have already been seen). The blue series is the number of job ads for occupations that typically require a Bachelor's degrees. The burgundy line is the demand for jobs that typically require a Master's degree or higher. The financial crisis is marked with a vertical hash.

Source: WANTED Analytics Hiring Demand Dashboard

The number of new ads for jobs requiring a Bachelor's degree fell by almost 100,000 jobs a week from its pre-recession peak of 250,000. The overall drop was 37.5% when we compare the number of online job postings in July 2008 to the number a year later. (To put the number of online job ads in perspective, the BLS reported that 5.2 million people were being hired a month before the recession. Only 4.1 million people were being hired on average each month in 2009).

Jobs for workers with advanced degrees grew, however, and are maintaining their upward trend. Between July 2008 and July 2009, the number of job ads rose from 51,450 to 52,200 – an improvement of 1.5%.

Both series are seasonally unadjusted. The series for Bachelor's degrees dips every year at Christmas time, and there's also a slight softening in August. Notice, though, that the series for Master's degrees is much less influenced by seasonal fluctuations.

Overall, this analysis supports the hypothesis that workers with highly specialized skills are less exposed to the economic cycle. The lack of seasonal fluctuation also suggests that these specialized workers benefit from some kind of steady, immutable demand for their labor.

Demand for workers with education levels less than a bachelor's degree less fell by 32% between July 2008 and July 2009. These are not shown in the graph – the trend follows roughly the same trend as the Bachelor's degree line, although there are about twice as many jobs for workers who's educational requirements are less than a Bachelor's degree.

Finance, Health Care, IT Stocks Lose Momentum as Hiring Slows

By Charles Thibault on February 2, 2010 in Business/Finance, Computer/Math/IT, Finance - XLF, Health Care, Health Care - XLV, Information Technology - XLK, S&P 500 - SPY.

Several stock market industry segments have taken hits over the past two or three weeks as the labor market situation deteriorated slightly during the second half of January.

Health Care stocks are down 2.9% over the last two weeks (XLV); Information Technologies stocks are down 9.5% over the last three weeks (XLK); and Finance stocks are down 7% over the last three weeks (XLF). The 4-week moving average of new unemployment insurance claims has gone up two weeks in a row.

Hiring in these three sectors – Finance, Health Care, and Information Technologies – has slowed in the past two weeks too, falling off the positive trend they started in September. What's worse, year-over-year hiring improvements have swung from positive to negative in these sectors.

The following analysis confirms a great Q4 in terms of GDP growth (+5.7% annualized), but also suggests that growth rates are slowing.

Let's first take a second to make sure we're not presenting conflicting information about the labor market situation, particularly compared to the Conference Board's Help Wanted Online series which uses the "same" data as we present here (HWOL). That series uses a "mid-month to mid-month" time-frame in order to match the BLS's sampling framework which measures national employment on the 14th day of each month. In early January, we did see some positive labor market signals. However, national Hiring Demand fell by 3.7% two weeks ago (after the HWOL sampling period closed). Since January 19th, the S&P 500 index has lost 4.3% too. This is after the S&P 500 gained 3.6% during the first couple of weeks of January on positive December UI claims data.

The following table compares year-over-year changes in sector Hiring Demand (the number of new online job ads) and weekly returns of sector Exchange Traded Fund (ETF). Sector ETFs are tradable securities which mimic the composition and returns of the different sector indices developed by Standard & Poor's. Sector indices are sub-components of the S&P 500.

Source: WANTED Analytics, Google Finance

January 2010 Employment Forecast – Withheld

By Charles Thibault on January 26, 2010 in BLS Nonfarm Employment.

Under exceptional circumstances, WANTED Technologies will withhold its forecast of US Total Nonfarm Employment for January 2010, as reported by the Bureau of Labor Statistics.

Every year, the BLS revises the entire history of US employment in what it calls "Annual Benchmark Revisions". These revisions create a break in the data series: forecasts of month-over-month changes aren't particularly useful when there isn't a 'next month' in the series, or when the data series is only a month old. This is what happens when the BLS revises its US employment time series – the old series ended, and a new, restated one begins.

Additionally, annual revisions are released at the same time as the monthly Employment Situation Summary report which contains the data we're forecasting. In other words, not only would we be forecasting a number for a series that's no longer being used, we'd be forecasting the future values of a dataset we don't have access to.

Additionally, we are expecting substantial revisions to 2009 employment numbers because of the volatility in the US economy over the past 16 months.

In combination, these three factors, have prompted us to withhold our monthly forecast:

The additional forecast standard error introduced by the annual Benchmarking process is 56,000 workers per month (estimated over the past 8 years). Revisions are greater during economically volatile periods: for the previous recession (2002) the benchmarking related forecast standard error was 107,000 workers per month.
The annual benchmarking revision process creates a dataset which we don't have access to but whose future value we must predict. It would be possible to forecast employment changes if we had access to the revised series before the release of the Employment Situation report; unfortunately revisions are released concurrently with the Employment Situation Summary.
Employment gains are "within two standard errors" of our forecast. When changes are around zero, there's a qualitatively different interpretation of changes in employment. For example, we wouldn't interpret two competing forecasts of -50,000 and +50,000 the same as we would two competing forecasts of +450,000 and +550,000 – even though both sets of forecasts are 100,000 workers apart. When exiting a recession, 'which side of zero' you are on is more important than your 'number', creating an asymmetric penalty response function to a forecast.

The BLS will release the January Employment Situation on February 5th, 2010, at 8:30am ET.

Several internal BLS data elements are revisited in detail during the Annual Benchmark Revisions:

Good News from UI Claims Report as Hiring Demand Jumps; Forecast of -18,000 for Next Week

By Charles Thibault on December 31, 2009 in Unemployment Insurance Claims.

The Department of Labor released some good news this morning: there were 22,000 fewer new Unemployment Insurance claims compared to the prior week, a 4.8% drop. Our forecast was for a drop of 6,000 so the news is better than we had expected. This improvement in the UI claims report comes as the number of online job ads jumped 8.6% in a single week on a seasonally adjusted basis.

This news also confirms our expectation that the Bureau of Labor Statistics will announce increases in levels of US employment for December.

The correlation between the number of new online job postings (Hiring Demand) and unemployment insurance claims has been -0.72 over the past 4 years. As more new online job ads appear on the internet, more people can find work, and fewer must file for unemployment insurance – hence the <negative> sign on the correlation coefficient. What's more, the correlation improves to -0.80 when looking at the one-week lagged value of Hiring Demand, supporting the hypothesis that Hiring Demand leads UI claims by a week. (Remember that the "best correlation" possible is -1.0 when two variables move in opposite directions).

Given the strength and robustness of this relationship, we can forecast changes to UI Claims data using the number of new online job ads. WANTED Technologies predicts that new UI Claims will fall by 18,000 on a seasonally adjusted basis for the week ending January 2^nd.

Hiring Demand for Translators and Linguists Grows; Best Market is Washington + Baltimore

By Charles Thibault on December 15, 2009

National Hiring Demand for Interpreters and Translators has grown significantly over the past several months according to data from WANTED Analytics, which tracks online job ad counts on over 1,500 employment specific websites. Hiring Demand for Interpreters and Translators is above 2007 levels.

Graph: National Hiring Demand (new online job ads) for Interpreters and Translators (SOC 273091)

Source: WANTED Analytics

What's interesting about Hiring Demand for Translators and Interpreters is that a single company represents 15% of the national total Hiring Demand: over the past 4 months, Science Applications International Corporation (SAIC) has posted over 300 jobs for these workers. The next largest advertiser for this type of position is the US Navy, which makes sense given the geographical extent of Navy operations.

Table: Top Advertisers for Interpreters and Translators (SOC 273091), past 4 months

2009-12-15 - Top Advertiser Labels - 273091

Source: WANTED Analytics

Forbes List of "America's Fastest-Recovering Cities" – Not a Good List for Job Seekers

By Charles Thibault on December 1, 2009

Forbes Magazine released an article of "America's Fastest-Recovering Cities" on November 19th, also producing a ranked list of America's 100 fastest recovering cities.

Unfortunately for Forbes readers, the list contains methodological issues which limit its usefulness in determining the "fastest recovering cities".

The most outstanding issue is the use of "levels" of economic indicators to measure recovery, as opposed to their changes. For example, the author uses the unemployment rate in the ranking system. The current unemployment rate has nothing to do with how quickly the labor market situation has improved, which is more accurately reflected by changes in the unemployment rate. Low unemployment rates might be a good measure of the "most stable cities", but not the "fastest recovering".

Let's compare two cities to see how using "levels" of economic variables is not that informative. Omaha's "Unemployment Rank" was No.1 in Forbes' list, with a 5.3% unemployment rate, while Wichita's "Unemployment Rank" was No.42, with an 8.6% unemployment rate. This indicates that Omaha's economy was not wrecked by the recession, which is great for Omaha. But that has nothing to do with how quickly the economy has improved, as suggested by article's "Fastest-Recovering" title.

You can see from the table below that Wichita, KS had higher unemployment than Omaha, NE before the recession even started, but its labor market situation has improved more dramatically since – in both absolute terms and relative terms. Wichita's unemployment rate is down 1.4 percentage points since July, while Omaha's unemployment rate is only down 0.5 percentage points. Relative to their respective July unemployment rates, Wichita's drop represents a 14% improvement, but Omaha improved only 9.4%. So, which city improved the fastest?

State	Date	Unemployment Rate	Absolute Change	Relative Change
Omaha, NE	OCT 2008	3.5%	-	-
Omaha, NE	JUL 2009	5.3%	+1.8%	+51%
Omaha, NE	OCT 2009	4.8%	-0.5%	-9.4%
Wichita, KS	OCT 2008	4.3%	-	-
Wichita, KS	JUL 2009	10.0%	+5.7%	+132%
Wichita, KS	OCT 2008	8.6%	-1.4%	-14.0%

What matters is: what's the unemployment rate in Omaha now, compared to before the recession; what's the unemployment rate in Wichita now, compared to before the recession; and how do those two differences compare to each other? In statistics, this method is called the "difference-in-difference estimator", which factors out local market particularities, for example the fact that Wichita had systematically higher unemployment than Omaha before the recession even started.

We use our own proprietary Hiring Demand Indicators, which is the count of new online job ads posted during a month, to rank the US cities based on their "actual recovery rates". The "recovery rate" is the average monthly growth in the number of online job ads, over the past 9 months. WANTED Technologies covers more than 1,000 employment-specific job boards.

Best Cities for Construction Managers to Build their Careers

By Charles Thibault on November 16, 2009

WANTED's Supply/Demand Ratios are constructed to maximize a job seeker's probability of finding employment:

For a given occupation, which cities have the greatest demand for them?
For a given city, which occupations are in most demand there?

Our S/D Ratios are an index scale centered around 100, with values greater than 100 indicating Hiring Demand that is greater than the national average. Sorting markets or occupations descending on the S/D Ratio maximizes a job seeker's chance of finding a job.

This week, we look at Construction Managers (Standard Occupation Code 119021). According to the Occupational Information Network (O*NET), Construction Managers are well versed in project management, must possess excellent communication skills, and must also have detailed knowledge of building codes and construction practices. Most Construction Managers have a bachelor's degree or higher, although this is not a formal requirement in many instances. It's also important to note that the Bureau of Labor Statistics lumps Construction Managers with "Management Occupations" (SOC 110000) – they are not part of the "Construction and Extraction Occupations" grouping (SOC 470000). The average annual salary for Construction Managers is almost $90,000, which indicates a high level of professional specialization.

We'll have to disagree with O*NET, however, on their claim that Construction Managers are "In Demand". In fact, according to WANTED Analytics, which tracks online job postings on over 1,000 employment websites, Hiring Demand for Construction Managers has been shrinking 2.6% a month on average over the past 4 years. On the other hand, Hiring Demand for all construction workers has deteriorated much faster, down 3.4% a month on average over the past 4 years.

Source: WANTED Analytics

Areas with Greatest Demand for Engineers

By Charles Thibault on November 11, 2009

Using our Supply/Demand Ratios, workers of any kind can use our occupation based heat map and table to determine which cities have the most Hiring Demand for them. Workers unable or unwilling to relocate can also use our S/D ratios data to see which occupations are in the greatest demand within their market.

Our Supply/Demand Ratios are constructed such that the number of online job ads is measured against local occupational employment counts. We'd expect larger markets to have more online job ads, so our S/D Ratios 'factor in' market size.

This week, we look at the metro areas with the greatest demand for Engineers. There are fifteen (15) different kinds of Engineers (as determined by the US Bureau of Labor Statistics). We focus on the 4 most important Engineers in terms of employment and job ad volume (the hyperlinks below bring a user to that occupation's heat map and market ranking table, which also includes job ad counts):

Civil Engineers (Standard Occupation Code 172051)

Electrical Engineers (Standard Occupation Code 172071)

Industrial Engineers (Standard Occupation Code 172112)

Mechanical Engineers (Standard Occupation Code 172141)

The following table ranks the "Top 20" US metro areas using a composite index of individual occupation market ranks. All figures in the table are "market ranks" for that occupation.

Table: Hiring Demand Metro Rankings, Engineers

MSA_CODE	MSA_NAME	STATE	Civil Engineers SOC 172051	Electrical Engineers SOC 172071	Industrial Engineers SOC 172112	Mechanical Engineers SOC 172141
47900	Washington	DC	2	6	7	2
35620	New York	NY	1	17	2	4
12580	Baltimore	MD	13	1	6	10
31100	Los Angele	CA	4	3	11	7
41860	San Francisco	CA	6	9	3	3
14460	Boston	MA	14		8	13
41740	San Diego	CA	28	7	4	24
38300	Pittsburgh	PA	3	20	17	8
16980	Chicago	IL	7	25	15	23
12060	Atlanta	GA	32	8	21	19
19100	Dallas	TX	8	27	24	29
41620	Salt Lake City	UT	36	18	16	22
37980	Philadelphia	PA	17	33	19	21
26420	Houston	TX	11	31	27	11
17460	Cleveland	OH	9	13	29	36
33460	Minneapolis-St. Paul	MN	10	35	28	18
25540	Hartford	CT	56	5	62	12
38060	Phoenix	AZ	18	22	48	37
42660	Seattle	WA	19	34	23	38
10580	Albany	NY		84	25	1
16740	Charlotte	NC	16	2	45	41

Civil Engineers	172051
Electrical Engineers	172071
Industrial Engineers	172112
Mechanical Engineers	172141

Jobs in Demand in Chicago

By Charles Thibault on October 19, 2009

WANTED's Supply/Demand Ratios are index values, centered around 100, which normalize the count of online job ads. Since we expect cities with more people to post more jobs, 'normalization' is achieved by comparing the number of job ads to local employment data.

By combining all our Supply/Demand Ratios into a single data structure, and assigning a national ranking for each city, it is possible to identify the following clusters of "in-demand" jobs in the Chicago-Naperville-Joliet metropolitan statistical area:

Management Occupations

Education Administration

Health Care Education

Insurance

Computer/IT

Transportation

Material Moving

Television/Production

Star Jobs in the Lone Star State

By Charles Thibault on October 5, 2009

WANTED's Supply/Demand Ratios™ helps compare levels of Hiring Demand by relating the number of online job ads in a city to the number of qualified workers already employed there. S/D Ratio values greater than 100 indicate Hiring Demand that is greater than the national average, in that market, for that occupation.

This week, we take a look at the top jobs in Texas by focusing on occupations that have the highest Supply/Demand ratio compared to other US cities.

Each of Texas' five major cities presents at least one cluster of "star jobs", with the Dallas-Forth Worth area showing four different clusters of highly sought after workers: