Job Openings Fell to Record Low in July

From the Wall Street Journal | Sept 10, 2009 | By KELLY EVANS

Employers
appear to be in no rush to hire back the millions who lost their jobs
in the recession, despite signs of improvement in the economy.

The U.S. had a record low 2.4 million job openings in July, the
Labor Department said Wednesday, the fewest since the department
started tracking the figure in 2000, and half the peak of 4.8 million
in mid-2007.

Getty Images

Unemployed
women look for jobs at a career center in Miami last week. A Fed report
Wednesday said 'labor market conditions remain weak.'

Meanwhile,
the Federal Reserve's report on business conditions around the U.S.,
known as the Beige Book, said "labor market conditions remain weak," a
significant hurdle for a strong recovery from the recession that began
in December 2007.

Economists worry that companies' hesitance to hire will restrain
consumer spending, the biggest component of U.S. gross domestic
product. Spending has stabilized since declining sharply in the second
half of 2008, and is on track to grow about 2% in the current third
quarter. But the boost could be short-lived.

More Signs of Stabilizing

See district-by-district summaries of the beige book findings.

View Interactive

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"The
fourth quarter is looking much more uncertain," said Zach Pandl, an
economist at Nomura Securities. "We need to start seeing some hard
evidence of a recovery in consumer spending and investment, and the
longer the labor market is weak, the longer it will take to get that."

Companies are squeezing more from fewer employees through overtime
or temporary workers. Nonfarm workers' productivity grew at a 6.6%
annualized rate in the second quarter, the most in six years.

Business in much of the U.S. are "cautiously positive" on the
economy's outlook, according to the Beige Book, which surveys all 12
Fed districts. Companies are similarly cautious about hiring and remain
wary of adding permanent staff, the report showed.

"We will have to be very thoughtful about the investments that we
make, and they have to return value," said Bill McDermott, president of
global field operations at international business software provider
SAP, speaking Wednesday at a technology conference in New York. "We
will not restore hiring, for example, to its prior levels until we know
there's a market there that can substantiate that," he said.

The
Walldorf, Germany, company is cutting its global work force from 51,300
to about 48,500 by the end of the year to lower costs. That will
include 5% to 6% of its more than 8,000 positions in the U.S. Such
caution explains why the nation's unemployment rate -- 9.7% last month
-- continues to climb, leaving some 14.9 million Americans unemployed.

For job hunters, the prospects of finding work vary by region.

In Detroit, where the local economy is reeling from the struggles of
auto companies, there are 18 unemployed people per job opening, the
most of any large metropolitan area, according to Indeed.com, a
Stamford, Conn.-based job-search engine. To arrive at the ratio,
Indeed.com cross-referenced job-listing data with Labor Department
figures from July.

Competition for jobs is also steep in Sunbelt cities hit hard by the real-estate collapse.

The Rochester, N.Y., metropolitan area, where Mike Lally, 41 years
old, lost his job in December, had seven unemployed people for every
job opening.

Mr. Lally had been a product manager for a local online education
company until his position was cut in December. "Obviously I didn't
want to see myself get caught in it, but I can see why it was a
necessary move on their part," he said.

He immediately began searching for a new job in the area, but has found few opportunities.

Rochester, whose metro area has about half a million workers, had an 8.2% jobless rate in July, up from 5.6% a year ago.

Meanwhile, the metro areas of Washington and nearby Baltimore have just one unemployed person per job opening.

"You've got the federal government here, the big defense contractors
and they've got lots of openings right now," said Zachary Duck,
president of ZKD LLC, a staffing firm in Manassas, Va. Washington's
unemployment rate, which includes its suburbs, was 6.2% as of July,
compared with Detroit's 17.7%.

-Sara Murray contributed to this article.

Write to Kelly Evans at kelly.evans@wsj.com