Jobs forecast sees more 'help wanted' signs across US

In Huntsville, Ala., a defense contractor is looking for computer whizzes who can help the company simulate weapons systems. A hospital in Corpus Christi, Texas, will be hiring 30 to 40 doctors and another 250 nurses, technicians, and clerks to back up the new MDs. And in San Francisco an online auto insurance company plans to double its 550-person workforce next year and will be looking for claims adjusters and customer-service specialists.

These are just some of the "hot" employment areas where job applicants will find someone to read their résumés. And these companies are far from alone: According to economists and employment analysts, the job picture will be brighter next year. Already, job bulletin boards like craigslist.com are seeing an uptick in postings, with some cities experiencing significant jumps over last year.

Expectations are for the unemployment rate to fall from the current 5.4 percent to as low as 5 percent. More important, the economy could be creating up to 225,000 new jobs each month, more than enough to absorb the 125,000 workers who enter the labor force each month.

"It may be the best year since 2000 in terms of the general job market," predicts Mark Zandi of Economy.com. "There will rising labor force participation and fewer underemployed."

An improving labor market is a critical element in the economic picture. To date, consumer spending and housing have led the recovery. Now, however, housing is starting to slow as higher mortgage interest rates and much higher home prices start to create some friction.

Although consumers continue to buy, savings rates have plunged to near zero - an economic factor that may presage some consumer pullback. Thus the new workers will help to take up some of the slack. "New jobs create income and without new jobs we can't increase spending so it's really the key to economic growth," says Sung Won Sohn, chief economist at Wells Fargo Banks in Minneapolis.

As new jobs are created, consumers take note. "Historically there is a strong correlation between employment and consumer confidence," says Mr. Sohn.

There are a variety of reasons behind the more optimistic view. Business is flush with cash and is expected to look for creative ways to use it. In the recent past this usually meant buying a piece of machinery to increase productivity. While that trend is likely to continue, it will be ameliorated by the expiration of the government's accelerated depreciation benefit.

"This made it cheaper to buy equipment than hire people," says Mr. Zandi.

At the same time, many American companies have slowed or stopped their downsizing. "Each year downsizing is dropping off about 20 percent," says John Challenger whose firm in Chicago, Challenger, Gray & Christmas, keeps track of announced layoffs.

Mr. Challenger says executives are no longer managing "from underneath a rock," that is, worried that the economy is going to falter at any moment. "There is more willingness to invest for the longer term."

It hasn't hurt that energy prices have fallen or stabilized, he says, adding that if there are changes in such forces as rising healthcare costs, fragile global politics, and the large budget deficit, "it could create some strong momentum for the economy and job growth."

However, no one expects a return to the 1990s when companies added workers just to make sure they had a strong bench, anticipating that new orders would develop. "Jobs are only going to come as they are needed, this is not an era where companies will create jobs willy-nilly," says Challenger.

In fact, even as the job market blooms, advocates for the jobless see a less bright picture. They point to the 3.3 million working families who exhausted their unemployment benefits in the first 11 months of 2004. At the same time, the long-term unemployment rate (the percentage of jobless out of work for six months or more) is more than 20 percent of all jobless workers for 26 months in a row, according to the National Employment Law Project.

Yet there is increasing anecdotal evidence that the job scene is changing, which could help many of the unemployed. For example, at craigslist.com companies searching for new employees are now trying to get their postings online before the weekend when individuals who already have jobs look at the classifieds. "That disappeared in 2001 and 2002," says Jim Buckmaster, the CEO of the San Francisco company.

At the same time, some of the companies posting jobs may be having more difficulty getting their ads answered, says Mr. Buckmaster. "We're seeing [fewer] people putting up a job posting and then calling to remove it because they had too many résumés posted." Buckmaster says the upturn is even helping areas of the country, such as Silicon Valley, which suffered after the dotcom bust. "Some of the big Internet companies like Google, Yahoo!, e-Bay, and Pay Pal are kicking up their heels over the last four to six months."

The uptick in e-commerce jobs can be seen through the plans of esurance.com, which sells auto insurance on the Internet. The San Francisco company currently has about 550 employees. But by the end of next year it's hoping to double that number as it hires claims adjusters and customer service representatives for its satellite offices in Sacramento, Calif.; Tampa, Fla.; and Dallas as well as in two new cities.

"We'd like to find people with a little experience in claims negotiation and settlement but we're also hiring entry-level folks," says Megan Hanley, vice president of marketing. "We're also hiring a lot of people in IT development, marketing, finance, and support."

High-tech defense contractors are also on the prowl for electrical engineers and computer jocks. One of those is Dynetics in Huntsville, Ala., which will be hiring 50 new technical-minded college grads as well as 100 others highly skilled workers. "Our growth model is to grow 10 percent a year in terms of our workforce," says Marc Bendickson, the CEO.

While high tech makes its comeback, hiring in the healthcare industry remains robust. According to a Department of Labor report, the industry will add 3.6 million jobs by 2012, largely to meet the growing needs of an aging population.

A prime example of this growth is at the CHRISTUS Spohn Health System in Corpus Christi, Texas, where the largest nongovernment employer in the area is expanding. Over the next five years, it plans to hire 150 to 200 doctors, who will then add about 1,000 of their own staff.

"Corpus Christi is the fastest growing mid-sized city in Texas," says Peter Banko, a vice president.

"In addition, we have a lot of retirees and our own doctor population is aging with many of them a lot closer to retirement," he says.

In fact, one of the growth areas is in the "helping" professions, such as criminal justice, healthcare, and education. This can be seen at the University of Phoenix where student enrollment in criminal justice courses is up 450 percent in the past 18 months, says Laura Palmer Noone, president of the institution.

"In the post 9/11 world, communities are ramping up their police forces," she says.

To meet the demand for its services, the university is building a new campus. Although many of the staff will commute from its other facilities, Ms. Noone says, "I'm sure there will be some new hires." The expansion means jobs at Sundt Construction, which has a contract to do some of the new campus work starting in April. With long lists of backlogs, including work on Phoenix's new light-rail system, Sundt will be looking for project managers, engineers, carpenters, and cement finishers.

In fact, with the Phoenix area still growing, finding skilled workers is becoming more difficult, says Doug Pruitt, the CEO of Sundt. The company now does its own training to develop its own workforce. "The industry is busy and there is a competition for people," he says.

This is also true nationally. According to the Department of Labor, construction will follow healthcare in new jobs with some 1 million new workers added by 2012. However, filling those jobs will be a challenge, says Mr. Pruitt.

"There is a severe craft shortage across the country as fewer and fewer people are going into construction."