Important earnings reports to watch this week

updated 4:36 p.m. ET Oct. 25, 2009

NEW YORK - Wall Street may be roaring again and manufacturers see a bright future selling their wares in Asia. But for many Americans, it's still a downturn until the jobs come back.

This week, earnings from several companies with deep ties to corporate payrolls, consumer demand and the labor market will show whether employers are hiring, firing or holding off on filling vacancies.

This recession has already seen more than 7 million lost jobs. That's because shoppers slowed their spending, bank lending froze and businesses cut back on capital investments. So cash-strapped companies slashed payrolls — and benefits — in order to curb expenses as sales dropped.

With lending and spending still weak, companies may not be ready to start hiring again anytime soon.

The unemployment rate in September was 9.8 percent, a 26-year high. Layoffs are slowing, but joblessness is expected to peak above 10 percent early next year.

"You're looking at really sluggish growth," said Joel Naroff of Naroff Economic Advisors. Economic activity could grow 3 percent or less for years to come, he said, and productivity gains mean companies won't need to hire many people.

Private economists predict that the unemployment rate won't drop to a more normal 5 or 6 percent until 2013 or 2014.

In order for them to fill vacancies now, employers need to see increasing demand — higher sales — for their goods and services from U.S. shoppers and businesses.

"There's a few positive signs, but there's still a shortfall in (corporate) profits from where they were a year ago or two years ago especially," said Jeff Bergstrand, an economist at the University of Notre Dame's Mendoza College of Business. "There's still a lot of cost cutting going on."

Here's a closer look at the companies reporting and what their results can tell us about the job market:

Monster Worldwide Inc.
Why it’s important: Monster Worldwide Inc. is a popular help-wanted Web site. Because it's used by job hunters and companies looking to hire, Monster provides a broad view of the employment market.

When it will report: Thursday, Oct. 29.

What the experts say: Monster will break even in the third quarter on revenue of $216.7 million, according to analysts surveyed by Thomson Reuters. Those results would be down from profit of 35 cents per share on revenue of $332.2 million a year earlier.

You’ll know the economy is improving if: Monster's revenue and earnings show that more companies are contracting with Monster to post jobs and gain access to job seekers' resumes.

"I think what we're going to see from a number of employment companies, including Monster, is that the worst is behind us," said Jim Janesky, an analyst for Stifel Nicolaus.

You’ll know the economy is not improving if: Monster's results show that staffing remains stagnant as employers continue to balk at hiring. Employment typically lags economic recoveries as employers refuse to hire until they are confident an economic upswing is sustained.

The quote: "There has been a ... shift going on for 10 years, of movement from print to online. That movement has not overcome the headwinds that Monster and other employment companies faced when the economy declined and unemployment rose," said Stifel Nicolaus analyst James Janesky.

WellPoint Inc. and Aetna Inc.
Why they’re important: WellPoint has more members than any other U.S. health insurer with more than 34 million people enrolled. It operates Blue Cross and Blue Shield plans in 14 states, including California, New York, and Ohio. Aetna is the third-largest insurer based on enrollment.

Health insurers have been hurt during the recession by employer layoffs, which reduce the number of people covered by employer-sponsored group health insurance. Some companies have cut benefits entirely.

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