what does this interview question mean?

A reader writes:

Right now my current job is terrible and I've been lucky enough to snag an interview here and there. During the last interview, I was asked by the manager if I was currently applying for other positions at other companies. I was taken aback as the question could be taken two ways -- either the manager was concerned that I was applying everywhere in a desperate effort to get out of my current position or they were concerned that I was in high demand.

My response was two-fold. First I reiterated that I was leaving my current company because the small size meant I reported directly to a vice president and that there wasn't a path to advancement. Secondly I pointed out that I was applying very selectively to positions and that I applied to this specific position because I was impressed with the company values and that I was suited to the position at hand.

From your perspective, what is the purpose of that question, and was my response appropriate? Should I have mentioned other companies that I had interviewed or applied with to inflate my value? Or would that backfire in some manner?

The most likely reason the interviewer asked this is that she was wondering if you were actively seeking to leave your job (and thus conducting a full-scale job search) or were motivated solely by this particular opening. It's also possible that she might ask this routinely as part of her interview schtick (I think every interviewer has questions they love to use, some of them better than others), and that she wasn't getting at anything in particular about you.

Your response was perfectly appropriate. Explaining that you're applying selectively is good. And no, you don't want to mention specific companies you're applying at, as nothing good can come of that. (For instance, if you mention another company where she knows the hiring manager personally, she might decide not to "compete" with her friend for you.)

I wouldn't try to read too much into this question.