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Is U.S. Job Security Returning?

Pinks slips were plentiful in the years following the financial crisis, but new data suggests American job security is making a comeback.

Jobless claims hit a low not seen since February 2008, according to Labor Department numbers released today. First-time claims dropped by 5,000 to a seasonally adjusted 348,000 in the week ending March 17. The figures comfortably beat most forecasts that claims would actually rise by 4,000. Continuing unemployment benefit claims — those drawn for more than a week — dropped by 9,000 to a seasonally adjusted 3,352,000 for the week ending March 10.

Several analysts say the numbers are a sign of renewed comfort in the workplace. Philip Noftsinger, president of CBIZ Payroll, a business services firm based in Roanoke, Va., says there has been a marked return of demand in the small business sector. “It drives vast amount of employment in this country,” he says. Noftsinger’s CBIZ Small Business Employment Index, a barometer for hiring trends among companies with 300 or fewer employees, was up 0.25% during February after falling 2.75% in January. He sees that trend continuing.

The fact that the latest data further discounts the seasonal hiring effect of the holidays that tends to limp into the earlier part of the year, economists say. The number of individuals exhausting their regular benefits — an indicator of long term unemployment — is down 11.1% from a year ago, the Labor Department data shows. The steady decline in the number continuing claimants suggest hiring is accelerating, says Patrick O’Keefe, director of economic research at J.H. Cohn: “The data are encouraging.”

There are other indications that job security is returning, too. The Employment Index for online job ads registered an 11% annual gain in February.This bodes well, especially given the larger size of the labor force versus previous post-recessionary periods, says Mark J. Perry, professor of economics at the University of Michigan-Flint.

However, some say there are still some “landmines” out there that could disrupt U.S. job growth like last year. In March 2011, Noftsinger says U.S. jobs recovery was hit by the earthquake in Japan and the debt problems in Europe. Those events reversed that trend, he says. “The growth that we’re seeing now is not strong enough to withstand such events,” he says. “The political instability in Iran — a major supplier of world oil — is a concern as is the continual addressing of the European debt concerns.”


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