Job Seekers Continue to Shift Towards Internet, Conference Board Reports

Job seekers are steadily increasing their use of the internet as a key part of their job search, The Conference Board reports. In the most recent survey of workers who searched for a job between January and September 2007, 73 percent reported using the internet compared to 66 percent of job seekers in the same time period in 2005.

"The Internet has become the most popular method of job searching," says Gad Levanon, economist at The Conference Board. "Newspapers are still popular as a major job search method, but job seekers reported using them less, dropping from 75 percent to 65 percent between 2005 and 2007."

Most job seekers continue to use more than one method in searching for a job. Online and print ads were not mutually exclusive and are still the most frequently used methods of exploring job openings. However, over half (51%) of job seekers reported networking through friends and colleagues as part of their job search. About one quarter (24%) responded that they used
other methods, such as employment agencies.

The research shows that the Internet is being used for a variety of job search functions, from gathering employer/job information (59 percent of job seekers), submitting resumes and applications (57 percent), to posting resumes on a website (40 percent), and signing up for email notifications (30 percent).

In September, there were 4,270,000 online advertised job vacancies according to The Conference Board Help-Wanted OnLine Data Series (HWOL). There were 2.78 advertised vacancies online for every 100 persons in the labor force in September. The HWOL data series reports monthly on the sum of the number of unduplicated online job vacancies.

The data on job search methods is based on a nationally representative sample of 5,000 households surveyed monthly for The Conference Board Consumer Confidence Index and is conducted on behalf of The Conference Board by TNS.

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Consumer Confidence Index Climbs to a Six-Year High

The Conference Board Consumer Confidence Index, which had dipped in June, rebounded in July. The index now stands at 112.6 (1985=100), up from 105.3 in June. The Present
Situation Index increased to 139.2 from 129.9 in June. The Expectations Index rose to 94.8 from 88.8.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for July's preliminary results was July 24th.

Says Lynn Franco, director of The Conference Board Consumer Research Center: "The rebound in Consumer Confidence has catapulted the Index to its highest reading in nearly six years (August 2001, 114.0). An improvement in business conditions and the job market has lifted consumers' spirits in July. The Present Situation Index is also at a near six-year high (August 2001 144.5). Looking ahead, consumers are more upbeat about short-term economic prospects, mainly the result of a decline in the number of pessimists, not an increase in the number of optimists. This rebound in confidence suggests economic activity may gather a little momentum in the coming months."

Consumers were considerably more positive about current-day conditions in July than they were in June. Those claiming conditions are "good" increased to 28.1 percent from 27.3 percent. Those saying conditions are "bad" decreased to 14.4 percent from 16.1 percent. Consumers were also more upbeat about the job market. Those saying jobs are "hard to get" declined to 18.4 percent from 20.5 percent. Those claiming jobs are "plentiful" improved to 30.5 percent from 27.6 percent in June.

Consumers were also less pessimistic about the short-term outlook. Those expecting business conditions to worsen in the next six months declined to 8.0 percent from 10.8 percent. However, those anticipating business conditions to improve dipped to 15.4 percent from 16.2 percent.

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Conference Board: U.S. Economy Will Benefit from Higher Bond Yields, Wage Increases, Rise in Short-Term Interest Rates

The Conference Board says that after a very long wait, long-term Treasury bond yields have begun to reflect a better outlook for the U.S. economy and the prospect that the next move in the federal funds rate will be up.

The forecast also shows a rise in short-term interest rates by 50 basis points in the second half of this year.

Manufacturing production is rising at about a 2% annual rate. Nondefense capital goods orders, a key investment indicator, have risen 20% in real terms since January. Much of the rest of the gain is in machinery orders. Although the pickup in orders is fairly broad-based, high-tech orders are somewhat lagging. High-tech orders, which should recover in the second quarter, are so closely related to the overall level of investment that it would be surprising if this sector didn't begin to rebound soon as well.

"The picture is a little less encouraging on the housing front," says Gail Fosler, executive vice president and chief economist of The Conference Board. Her analysis appears in StraightTalk, a newsletter designed exclusively for members of The Conference Board's global business network. "But progress is underway. Demand is slowly coming back to the market. Mortgage applications are up about 17% since the low point last August. And the drop in housing starts has been so sudden and dramatic that it has taken inventories down to close to historic averages-though still far above the levels common during the past 10 years."

But housing is a sector in which long-term forces are shaping the outlook as well as short-term cyclical events. The housing market has enjoyed a decade of strong (booming since 2000) conditions. The strength in housing received not inconsequential help from a long-term trend to lower mortgage rates, which have helped to offset higher housing prices to a great degree.

As a result, the "housing affordability index" has remained high and within a remarkably narrow range of about 120 to 140 since 1993. (An index reading of 100 means that a family earning the median income has enough money to qualify for a mortgage on a median-priced home assuming a down payment of 20%). Beginning in 2004, housing affordability began to plummet as both mortgage rates and house prices rose. The current reading is about 110, which given the definition of the index would not seem to be that low. But the reading is one of the lowest since 1990.

"This weakness in the U.S. housing market is not just a cyclical phenomenon but a response to some very important long-term trends," says Fosler. "Home prices outpaced average incomes, so there would be a downward bias in any event. As mortgage rates rise, the downward pressure on prices will persist. A surge in wages could solve this problem, but rapid
increases in wages would create other problems like inflation that the Federal Reserve would have to address with higher interest rates. While housing is not likely to be a drag on the U.S. economy in the second half of 2007 and 2008, it is also unlikely to make much of a positive
contribution for the foreseeable future."

Consumer spending has certainly been buffeted by slower housing prices and higher gasoline prices. The stabilizing force has been the tight labor market and rising wages. Earnings have slowed, but as in the last cycle, wages will begin to pick up again as growth accelerates and the unemployment rate remains low. Real wage and salary income has been growing at a 2% to 4% annual rate -- with ups and downs due largely to the ebb and flow of gasoline prices. The inflation-adjusted growth of consumer spending has remained generally in the 3% to 4% range since 2003. But retail activity has been hard hit by the housing slowdown. These trends explain why the retail sector and particularly the home-improvement retailers have been under so much pressure.

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Report: Online Advertised Job Vacancies Dip in June

Total online job ads were 4.3 million in June, a slight drop of 94,000 or 2 percent from May, according to The Conference Board Help-Wanted OnLine Data Series.

Online advertised vacancies continue to be up substantially (24%) over the year (June'06-June'07). There were 2.8 advertised vacancies online for every 100 persons in the labor force in June.

"Online job demand has been virtually unchanged over the last few months but continues to show a better than 20 percent gain over last year,"says Gad Levanon, economist at The Conference Board. "Tight labor markets in many areas of the country and in specific occupations and industries like IT and healthcare are forcing companies to advertise more aggressively than last year in order to find the employees they need. We do not expect economic growth to accelerate until the end of the year, but finding theright employee is already a challenge in many areas of the country."

The 4.3 million unduplicated online advertised vacancies in June include 2.7 million new ads that did not appear in May, as well as reposted ads from the previous months. During June, both total and new ads declined by 2 percent from the previous month. Over the year (June'06-June'07) total ads and new ads rose 24 percent and 19 percent, respectively.

The June figures reported in the Help-Wanted OnLine Data Series reflect the sum of the number of unduplicated online job ads for each dayfrom mid-May to mid-June. This new series, which includes data from April 2005, does not have sufficient history to allow for seasonally adjusted monthly data.

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