Employment in the United States has undergone a severe and steady decline through the first half of 2009. The first two quarters of the year saw unemployment reach near-record high levels, and although certain segments of the economy are beginning to stabilize and gradually recover from the recession, many analysts predict the job market will remain volatile for a long time to come. But there may be more opportunity on the horizon than expected.

According to the U.S. Department of Labor, employment nationwide declined by 247,000 jobs in July 2009, bringing the total number of unemployed Americans to 14.5 million and the unemployment rate to 9.4 percent. However, the rate of job loss showed some signs of slowing, as the average job loss from May to July was 331,000 per month, which in turn was roughly half the average of 645,000 for the preceding six months.

Manufacturing employment dropped by 52,000 jobs in July, bringing the total job loss for the sector to 2 million since the recession began. Employment in the construction industry fell by 76,000 jobs, compared to an average of 117,000 per month between November and April, while transportation and warehousing shed 22,000 jobs, bringing the average monthly job loss in the industry to half the rate between November and April.

Jobless claims, which serve as indicators of layoff rates and companies' capacities for new hiring, are still on the rise, reaching a seasonally adjusted 576,000 in mid-August, according to the Labor Department. In addition, the number of long-term unemployed, who have been jobless for 27 weeks or more, increased by 584,000 over the month, meaning that roughly one out of three unemployed people has been jobless for over half a year.

According to the Associated Press, although jobless claims are trending down after remaining above 600,000 for most of 2009, "[i]n a healthy economy, initial claims are usually around 325,000 or below."

However, including federal emergency programs, the total number of Americans receiving unemployment benefits fell from 9.25 to 9.18 million through July, despite Congress adding an additional 53 weeks to the standard 26 weeks allotted for unemployment benefits.

High unemployment remains a problem despite signs that other segments of the economy have bottomed out and are beginning to recover. But the challenging job market is increasingly contributing to instability in still-struggling sectors, such as the housing industry.

"The country's growing unemployment is overtaking subprime mortgages as the main driver of foreclosures, according to bankers and economists, threatening to send even higher the number of borrowers who will lose their homes and making the foreclosure crisis far more complicated to unwind," the Washington Post reports.

The elevated unemployment rate is shifting housing foreclosures from subprime to prime mortgage holders, reflecting the growing number of traditionally safer borrowers facing delinquency due to unexpected layoffs and difficulty finding new employment in a severely competitive market.

"As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts. A year ago they accounted for one in five," Jay Brinkmann, chief economist for the Mortgage Bankers Association, said in a statement.

But these negative indicators may be only a temporary spike considering the employment outlook for the remainder of 2009, especially when compared to the first-half of the year.

In a recent survey of 28,000 employers conducted by Manpower, an employment services and research firm, 15 percent of U.S. employers expect an increase in hiring in Q3 2009, versus 13 percent who predict declines in staffing. The remaining participants expected either no change or were too uncertain about hiring conditions to make a prediction. The net employment outlook thus shows a positive yield of roughly 2 percent, versus the 1 percent gain in the first quarter.

Although the results are far from pre-recession numbers, they do show a tendency for gains to outpace losses, which may give a much-needed boost to the sluggish job market. In terms of regional net outlook, employers in the Northeast expect a 4 percent increase, while the Midwest is forecast for a 2 percent gain and the South and West each expect 1 percent increases.

On a monthly basis, the numbers are even more positive. According to the Society for Human Resource Management's latest employment report, 32.6 percent of employers in the manufacturing sector expected to conduct some hiring through August, while 21.6 percent expected their workforce to decrease. This comes to a net increase of 11 percent of respondents adding jobs, the largest boost in new manufacturing positions since October 2008.

According to Bureau of Labor Statistics data cited at JobBait, an executive employment firm, as of the 12 months ending June 2009, jobs in the construction industry are growing faster than the workforce in North Dakota and Louisiana while transportation and warehousing is making gains in North Dakota and Nevada. Mining and logging is increasing jobs in a wide number of states, including Oregon, Illinois, Iowa and Pennsylvania.

Manufacturing may also be rebounding, as the industry experienced growth in the Mid-Atlantic region this August for the first time in 10 months, Reuters reports. In New York state, the manufacturing increase was the first since April 2008.

The regional growth may be indicative of wider improvement in the manufacturing sector, as New York and the Mid-Atlantic are not heavily reliant on automotive manufacturing, which until now has driven much of the recovery in the sector.

Although there are some positive signs in the U.S. hiring outlook and several industries are experiencing a gradual upturn, the unemployment rate remains high and the job market is likely to remain difficult through the rest of 2009, albeit less challenging than in previous quarters.

U.S. Federal Reserve chief Ben Bernanke was quoted in a recent Reuters report: "[T]he prospects for a return to growth in the near term appear good," but, "recovery is likely to be relatively slow at first, with unemployment declining only gradually from high levels."

Resources

Employment Situation Summary - July 2009
U.S. Department of Labor, Aug. 7, 2009

Unemployment Insurance Weekly Claims Report
U.S. Department of Labor, Aug. 20, 2009

New Jobless Claims Rise Unexpectedly to 576K
by Christopher S. Rugaber
The Associated Press, Aug. 20, 2009

Unemployment Strike Compounds Foreclosure Crisis
by Renae Merle
Washington Post, Aug. 18, 2009

Delinquencies Continue to Climb, Foreclosures Flat...
Mortgage Bankers Association, Aug. 20, 2009

Manpower Employment Outlook Survey: United States
Manpower, Inc., June 9, 2009

LINE: Hiring in August Will Follow Recent Pattern of Gradual Monthly Improvement
Society for Human Resource Management, August 2009

Job Market Report
JobBait, Aug. 7, 2009

U.S. Regional Manufacturing Rebounds, Claims Rise
by Lucia Mutikani
Reuters, Aug. 20, 2009

Bernanke Says Prospects for Return to Global Growth Good
by Mark Felsenthal and Kristina Cooke
Reuters, Aug. 21, 2009