It's pretty clear that if the market for junior developers is <5% of the total software engineering market, we're not in an era of huge expansion.
But, the question is: is 5% a harbinger of future shrinking in Silicon Valley (all the junior developer jobs are elsewhere) or a sign that we've gotten to a stable economy for software developers.
The first rule of prognosticating in the tech sector is to discount everything that happened during the dotcom bubble (~1995-2000). We saw a veritable explosion of IT spending, IT staffing and overpaid, underskilled staff all over the map. The demand was so great that there was a huge influx of junior staff unlike anything we'd seen before. In some respects, we're still cleaning up from that mess...
When I got my BSc, the economy was in a slump. I saw the market as ageist, with most jobs demanding at least 5 years experience (not including academic work). Now, I see why there was such a focus on that magic five years: it's a long enough period of time to have seen or made all the stupid mistakes on someone else's watch, but not so long as to have "too much" experience to be an expensive hire.
Today's job market is much like what we saw in the 1990s. Lots of jobs for people with >5 years experience, but little demand for junior developers. With a glut of senior people, you don't need as many junior people around. Let's face it -- junior people work best when they work with senior staff, not in place of them. Staffing a department of entirely junior programmers is both an option of last resort, and a recipe for disaster. If these junior developers had some real world experience, they'd be less risky, worth more and -- by definition -- not be junior developers anymore.
When the market starts to get tight again, we'll see demand increase for junior programmers. The market could get tight for a lot of reasons: senior developers moving up to management, retiring, going back to school, not tracking this year's hot platform, or (worst case) oodles of VC money funding every hairbrained scheme to make money off of the web, and hiring everyone in sight who can spell RSS, WSDL or EJB. But I hope we don't see the last one again.
So, to answer Will's question: the fluctuation is cyclical. I wouldn't read anything about long term trends from the current lull in openings for junior developers. We may never see such a huge demand for junior developers as we saw during the boom, and that's not necessarily bad.