According to the Bureau of Labor Statistics, little changed in the job market in May; job gains continued in professional and business services, health care, and mining. Employment levels in other major private-sector industries were little changed, and local government employment continued to decline. Jobs recovery is rarely a boom, and is more often a series of ebbs and flows in hiring levels. For example, after the 1991 recession, employment did not regain its previous peak for 23 months, or for 39 months after the recession of 2001.
Despite a rocky jobs report, there might still be a few signs that the U.S. job market is showing signs of improvement.
- Private employers have added 2.14 million workers since March 2010 (9 months after the recession ended), about a quarter of the 8.8 million jobs lost since the beginning of the recession in 2007.
- Corporate profits are surging. Earnings grew at an average annual rate of 29.9 percent in the eight quarters through the end of 2010, the strongest such growth in more than half a century, according to a recent JPMorgan report.
- A survey of 99 companies completed June 6 showed businesses are more optimistic about capital spending for this year than they’ve been since records began in 2003, according to a report from ISI Group Inc. in New York. Hiring plans were the highest in five years.
- Fewer people are seeking second jobs. This is an indication that underemployment is declining.
- Jobs for recruiters are up 20% in the last 6 months. This is a good sign that companies companies plan to do more hiring.
Strong corporate profits create the incentive to generate more profits. Companies are now sitting on a lot of cash, and the best way to generate more profits is through investments. As companies grow and invest, they will begin hiring more people.
It will take some time, but signs are pointing to a growth in hiring as the job market gradually gains some steam.