Thursday, March 15, 2007

Help Wanted

Today's subject will be jobs and help-wanted ad spending.

But before that, just a short comment to follow up on something I brought up a few days ago: political awareness of the mortgage debacle is rising fast. I just saw an interview with Mrs. Clinton on Bloomberg TV yesterday and the very first thing mentioned was mortgages and who is to blame - this issue is just now hitting the major politicians' radar screens and I am certain that they will quickly zoom in. Homes are at the very heart of the American way of life and this presidential race has started early, thirsty for major issues beyond just Iraq.

Mrs. Clinton made clear that she does not favor a government bail-out of borrowers and called instead on the lenders to "work with the borrowers"; experienced observers can read between the lines and come to their own conclusions about issuers, investment banks and investors/speculators in the mortgage and credit derivatives arena.

On to jobs.

One of the less-frequently followed concurrent economic indicators is spending for help-wanted classified ads in newspapers.

The chart below is produced with data from the Newspaper Association of America
showing the year-over-year change in such ad spending (no data available for 1992-94). The latest eight quarters are broken out separately for greater detail (hatched bars).

Three points: a) Periods of economic weakness/recession coincide with negative ad spending, b) compared with previous rebounds, want-ad spending was quite anaemic following the 2001-02 plunge and c) the last three quarters have been progressively more negative.

These observations tie in quite well with my previous post (March 11, below) about the current slow job creation.

Source: Newspaper Assn. of America