It's not as dismal as the Modern Language Association.
On the debit side, much attention focused on the fact that the AEA-run website, where potential employers of PhD economists advertise their positions, has added a new section called "Suspended or Cancelled Listings". Here it is noted that a "non-trivial economic downturn" has forced some employers to suspend or cancel job searches. As of December 28th, a week before the actual interviews, 84 previously advertised searches had been called off, representing 5% of the number of jobs available by the reckoning of the director of the AEA, John Siegfried.
Even before the cancellations, the 2,881 new job listings this year were lower than last year's 2,914. Still, as Mr Siegfried pointed out, this is many more than the roughly 1,000 new PhDs that emerge from American universities in an average year. So why the worries?
Several reasons, I think. First, academic jobs at universities with graduate programmes, the top choice of most new PhDs, are about a third of the total, at 1,034 (and this includes positions for experienced academics). Then there is the fact that quite a few of the nearly 3,000 jobs listed were posted prior to September, a large fraction of which are not suited for people fresh out of school. So the supply of jobs may not be as plentiful as the aggregate numbers collated by the AEA suggest.
But a bigger part of the answer may be that some suspect that more universities are going through the motions without the intention of actually hiring anyone. In that sense, the cancelled listings may represent the tip of a larger iceberg. I overheard a professor from a leading west-coast university saying that while his department was interviewing many candidates, someone hoping to actually get hired would have to "walk on water".
On the positive side, several people made the point that those doing the hiring are, after all, economists. Faced with the possibility of oversupply in the market, some see a golden opportunity to hire the kind of high-flier who would normally be out of their reach. Less prestigious institutions with a bit of cash to spare have in some cases increased the number of advertised positions after seeing the list of cancelled searches (specific instances I heard about included Montana State, as well as a lot of European universities looking to reverse recent brain drain). Some business schools see an opportunity to hire bright finance PhDs they would normally lose to Wall Street. So the adjustment, such as it is, is likely to be on the "quality" margin—people settling for smaller schools, or locations they might not initially have considered.
But over the next few weeks/months, it will be interesting to see how this all plays out. This site, which is a wiki run for and by job market candidates, is pretty informative, and it’ll be fascinating to see how many schools that have conducted interviews actually pull the trigger. If the pessimists have it right, there are going to be a lot fewer universities in this category than in normal years.But it is depressing to have to let our candidates know that our search is now among the "suspended or cancelled" even though the Association hasn't picked this up yet.