When I was in graduate school, the academic/research lab job market was pretty soft. By the time I graduated, it was a little better, but not great; you could see things heading upward, though. (Of course, I should point out here the caveat that generally the job market always seems a bit softer in theory than in anything else...)
So, looking back this last year, what is everyone's take on the job market this past year (and the trend for next year)? It seemed to me that while it's not in a completely disastrous state, it's not great, and it's been trending downward the last year or two. The effects of the economy and the long-term exodus of CS majors is not helping in academia, and while there's some availability in research labs, there doesn't seem to be a lot of spare capacity. Google is providing a much-needed outlet, as are (to a lesser extent) Yahoo Research and the new Microsoft Cambridge lab, but it's not clear (to me) how all three will play out long term, or even in the next few years. (If it weren't for sponsored search, I hesitate to think where the theory job market would be today. And if Yahoo ever does get bought out, what will happen to research...?)
There still seem to be jobs available for the best people (or, depending on your point of view, the people with the best buzz), and we still don't seem as saturated as I always hear physics and math are. But the market seems weak, and it's something students should be aware of.
I'd be happy to hear more informed opinions, or disagreeing opinions, or especially insights on the job market from non-theory people...