BLS Analysis for August 2013

Bob Marshall’s August 2013 BLS Analysis; 9/6/13

August BLS Preface

 

TBMG News

Bob Marshall – Training/Coaching Updates

I will be presenting at NAPS this September 11^th and 12^th in Las Vegas* at the Cosmopolitan.

Wednesday, September 11^th, 2013, 11:30am-12:30pm (PT), “Your Desk as a Manufacturing Plant”.

Thursday, September 12^th, 2013, 3:00pm-4:00pm (PT), “How to Teach a Recruiter to Bill $1,010,349.50 in One Year”.

*Note:  I will arrive in Las Vegas on Tuesday afternoon, September 10^th and be leaving Thursday evening, September 12^th, after my second presentation.  For those of you who have expressed an interest in meeting me there, for individualized training/coaching, please contact me prior.

My Independent Recruiting Virtual Summit presentations

Later in September, you will be able to listen to two of my pre-recorded webinar presentations during the Independent Recruiting Virtual Summit, put together by Neil Lebovits.  Keep an eye on your inbox for specific details, dates and times.

My presentations will be geared toward both recruiters and contracting/temp specialists.  The two webinars are entitled, “Negotiating Techniques” and “Establishing Elegant Rapport through Elegant Communication”.

COACHING**

**Now, if you are serious about increasing your billings, give my prized $1,000,000 billing student, David Thaler (502-531-9890), a call.  He will let you know what I did for him and what I can do for you to help you reach your maximum potential.  If you are ready to invest in yourself and to receive the info you need, to bill at high levels, I can give you that information.  Then it will be up to you to execute.  The ball is in your court.

Here are the details of my three coaching plans:

This is a 3-month plan.  In this plan, I will put in place all of the tools that you will need to become a profitable recruiter.  My five major products (training manual, daily planner, QRG, forms and the ‘Classics’ audio series) are included in this selection.  We will have a meeting, up to one hour, once per week and I will be available to continually work with you and answer your questions on a weekly, 8am-5pm basis.  Admission into the Illuminati Think Tank series is included, with access to select past recordings.

–$2000 per month (Three Month Commitment – prepaid via PayPal)

This is a month-to-month plan.  In this plan, I will be available to you for 4 separate meetings, up to one hour, to be parceled out as you choose, but must be used within a 4-5 week period.  Admission into the Illuminati Think Tank series is included.

–$1000 per month (One Month Commitment – prepaid via PayPal)

 

This is an hourly ‘a la carte’ plan.  Once you have selected a date/time for our one hour meeting, (for coaching and/or training) and confirmed that date/time with me (and prepaid via PayPal), this plan goes into effect.  After the meeting, you are also entitled to follow-up emails during the next five days.

–$300 per session (One Hour Commitment – prepaid via PayPal)

*All the details of my coaching plans, and products, are available to you on my website:  www.themarshallplan.org or you can reach me at 770-898-5550 or email me at:   bob@themarshallplan.org.

Preface

Many of you continue to correspond with me about these monthly BLS analyses and have asked if it is OK to use them in your presentations.  The answer is, of course, yes!  That is why I spend the time to assemble this information.  I would encourage any of you who have that desire to weave any of the information I have printed below into your presentations.  I write these analyses for the benefit of our recruitment industry in general and for the members of my distribution list in particular.  So use this info as you deem appropriate.

I also write these monthly BLS analyses to not only counterbalance the negative/incorrect press reporting of our general economic state but, more than that, to remind all of my recruitment readers that, at the level we work, there is no unemployment and so we must recruit to find the candidates our client companies so desperately need!

So, to my recruiter colleagues, get out there and do what your name implies…RECRUIT!  When your client companies have unique and difficult positions to fill, they need you.  When they are being picky, they need you.  When they are longing for more production from fewer employees, they need you.  Go fill those needs.  These should be the halcyon days in the recruitment arena!

Finally, always remember that we are not in an HR business, but in a ‘circumventing the time factor in the hiring sequence’ business—and adding value to our client companies.

 

 

New Survey Rates Recruiters Third in Importance behind Doctors and Dentists

Communicate, UK, August 10, 2013

Only Doctors and Dentists Beat Recruiters says the survey of mid-to-senior finance professionals, conducted by the UK firm, Communicate

 

The majority of mid-to-senior professionals deem their relationship with recruiters important, but are more loyal to a consultant than agency

When compared with other professions, respondents rated recruiters third in importance behind doctors and dentists

Four-fifths of professionals (81%) deem their relationship with recruiters important or very important. Only 3% feel the relationship is insignificant or very insignificant, and a mere 16% are indifferent.

Indeed, when asked to rate a variety of professions in terms of importance to them, respondents placed recruiters third – behind their doctor and dentist, and ahead of their lawyer, accountant and mortgage broker.

The survey of mid-to-senior finance professionals, conducted by Communicate in the second quarter of 2013, sought to examine whether a recruiter is a partner for life. Respondents were asked to be frank about their experiences of dealing with recruitment agencies, both as jobseekers and employers.

A majority 72% revealed that they are more loyal to their preferred recruitment consultant than to an agency, with 63% indicating they feel there are too many recruitment agencies in the market. Despite this, 81% of respondents turn to several agencies when jobseeking or filing a vacancy, with only 19% using just one trusted firm.

When asked how they feel about filling vacancies in their business, 78% indicated that they find the process time consuming, 34% annoying, and 34% inconvenient – perhaps explaining why four fifths turn to recruitment agencies for assistance.

However, 42% revealed that working with a recruitment agency does not ease the pressure of filling a vacancy, 37% feeling staff turnover within recruitment is too high and 63% believing recruitment consultants do not have enough industry/sector knowledge.

In an open-ended question asking what individuals like about working with recruitment agencies, answers included:

Ability to see market trends and the general backdrop to recruitment.

They find roles we otherwise wouldn’t hear about.

Useful networks.

Honesty and frankness.

Their ability to provide a personal assessment of candidates and their strengths/weaknesses.

Initial filtering of candidates to ensure shortlists meet role requirements.

They save time and hassle.

Conversely, when asked what they dislike about working with recruitment agencies, respondents listed the following gripes:

The transient nature of some recruiters gives the industry a bad name.

Sometimes I am mis-sold roles.

No feedback.

The silos of interim v. permanent and industry/sector – you get pigeonholed, restricting the opportunities you hear about.

James Lock, Founding Partner of Communicate, comments, “Recruitment is a people-centered industry, so it is gratifying to see the importance professionals place on their relationship with recruiters. As a sector, we work hard to build relationships and deliver a service which really makes a difference to people. Clearly, this is highly valued by clients and candidates alike.

“As with every profession, there are things which can be improved, but I definitely feel the industry – historically plagued with a poor reputation – is mending its ways.

“With economic prospects improving and employment figures increasing, confidence in the recruitment sector continues to grow, both amongst leading agencies (who continue to find the very best candidates) and those making hiring decisions.”

 

 

What Hiring Managers look at may be surprising

Daily News, August 28 2013

Skills and experience may be essential, but employers may also take other factors into account such as a sense of humor, eye for fashion or knowledge of pop culture, according to a survey by CareerBuilder.

The survey included 2,076 hiring managers and human resource professionals across industries. They were asked, “If they had two equally qualified candidates, which factors would make them more likely to consider one candidate over the other?”

Here are their responses:

• The candidate with a better sense of humor, 27%
• The candidate who is involved in his or her community, 26%
• The candidate who is better dressed, 22%
• The candidate who I have more in common with, 21%
• The candidate who is more physically fit, 13%
• The candidate who is more on top of current affairs and pop culture, 8%
• The candidate who is more involved in social media, 7%
• The candidate who is knowledgeable about sports, 7%

Survey Results:  Small Businesses, Big Recruiting Challenges

Finding Capable Employees is Greatest Management Hurdle for Small Businesses

MENLO PARK, Calif., August 6, 2013 /PRNewswire

When it comes to running a successful business, finding a highly skilled team of employees is crucial. But it isn’t always easy. In a recent survey by Robert Half, six in 10 (60%) small business owners said the biggest challenge in hiring or managing staff is finding skilled professionals for the job. About one in five (19%) cited maintaining employee morale and productivity as the chief concern.

The survey was developed by Robert Half, the world’s first and largest specialized staffing firm. It was conducted by an independent research firm and is based on interviews with more than 300 small business owners and managers from a stratified random sample of companies with less than 100 employees in the United States.

Small business owners and managers were asked, “Which one of the following is your company’s greatest challenge when it comes to hiring and managing staff?” Their responses:

Finding skilled workers	60%
Maintaining employee morale and productivity	19%
Managing difficult employees	8%
Retaining staff	7%
Something else	6%
Total	100%

“Large corporations often have established brand recognition and larger human resources budgets, which can provide an advantage when attracting talent,” said Paul McDonald, senior executive director with Robert Half. “But small businesses may appeal to professionals who want to acquire a variety of experiences and move up quickly. These companies can level the playing field in their recruiting efforts by highlighting what makes their cultures unique and emphasizing opportunities for skills development.”

 

Analysis:  Obamacare, tepid U.S. growth fuel part-time hiring

by Lucia Mutikani

August 21, 2013

WASHINGTON (Reuters) – U.S. businesses are hiring at a robust rate. The only problem is that three out of four of the nearly 1 million hires this year are part-time and many of the jobs are low-paid.

Faltering economic growth at home and abroad and concern that President Barack Obama’s signature health care law will drive up business costs are behind the wariness about taking on full-time staff, executives at staffing and payroll firms say.

Employers say part-timers offer them flexibility. If the economy picks up, they can quickly offer full-time work. If orders dry up, they know costs are under control. It also helps them to curb costs they might face under the Affordable Care Act, also known as Obamacare.

This can all become a less-than-virtuous cycle as new employees, who are mainly in lower wage businesses such as retail and food services, do not have the disposable income to drive demand for goods and services.

Some economists, however, say the surge in reliance on part-time workers will fade as the economy strengthens and businesses gain more certainty over how they will be impacted by Obamacare.

Executives at several staffing firms told Reuters that the law, which requires employers with 50 or more full-time workers to provide healthcare coverage or incur penalties, was a frequently cited factor in requests for part-time workers. A decision to delay the mandate until 2015 has not made much of a difference in hiring decisions, they added.

“Us and other people are hiring part-time because we don’t know what the costs are going to be to hire full-time,” said Steven Raz, founder of Cornerstone Search Group, a staffing firm in Parsippany, New Jersey. “We are being cautious.”

Raz said his company started seeing a rise in part-time positions in late 2012 and the trend gathered steam early this year. He estimates his firm has seen an increase of between 10 percent and 15 percent compared with last year.

Other staffing firms have also noted a shift.

“They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”

CAUTIOUS STRATEGY

The delay in the Obamacare employer mandate “confused people even further,” said Bill Peppler, managing partner at Kavaliro, a technology staffing firm in Orlando, Florida. “When we talk to customers, I still don’t think anyone has a handle on this.”

Obamacare appears to be having the most impact on hiring decisions by small- and medium-sized businesses. Although small businesses account for a smaller share of the jobs in the economy, they are an important source of new employment.

Some businesses are holding their headcount below 50 and others are cutting back the work week to under 30 hours to avoid providing health insurance for employees, according to the staffing and payroll executives.

Under Obamacare, any employee working 30 hours or more is considered full-time. An effort to trim hours might have helped push the average work week down to a six-month low in July.

“As organizations and companies reduce the hours of part-time workers, they still have to replace the capacity, so they go out and hire additional part-time workers,” said Philip Noftsinger, president of CBIZ Payroll in Roanoke, Virginia, which manages payroll for more than 5,000 small businesses.

Some large companies are also leaning more heavily on part-timers.

Wal-Mart Stores Inc has been hiring more part-time workers, although it says the move is to ensure proper staffing when stores are busiest and is not an effort to cut costs.

Spokesman Kory Lundberg said the world’s largest retailer promotes about 75,000 people from part-time to full-time work each year and is on track to do so again in 2013.

Similarly, a memo that leaked out from teen and young adult retailer Forever 21 last week showed it was reducing a number of full-time staff to positions where they will work no more than 29.5 hours a week, just under the Obamacare threshold.

In a statement, the company said the move will affect fewer than 1% of its U.S. store employees, and was taken to better align staffing with sales expectations – not to lower costs under the Affordable Care Act.

Some public school boards and local governments, including the city of Long Beach in California, are also cutting hours.

“The difference between 30 and 40 hours can be the difference between being able to make ends meet month-to-month,” said Heidi Shierholz, a senior economist at the Economic Policy Institute in Washington.

“That contributes to reduced living standards for American families and translates into having less income to spend on goods and services, which holds back the economy.”

WEAK ECONOMY NOT HELPING

Obamacare is only one factor. The surge in part-time employment also reflects an economy that has struggled to maintain decent growth.

That has left business owners such as Jason Holstine, who owns a building supply store in Baltimore, Maryland, reluctant to take on full-time staff.

Holstine said he was more concerned about budget policy in Washington than about Obamacare, given that federal government furloughs tied to across-the-board spending cuts led some of his clients to put home renovations on hold.

“We are still working in an environment that is very hard to forecast the near future and remains very cash-constrained,” said Holstine. “We were always nimble, but we had to become more reactive. Using part-timers gives us more flexibility.”

In a paper published last month, the San Francisco Federal Reserve Bank said uncertainty over fiscal and regulatory policy had left the U.S. unemployment rate 1.3 percentage points higher at the end of last year than it otherwise would have been. The jobless rate stood at 7.8 percent in December; it has since fallen to 7.4 percent.

“That’s about 2 million jobs below where we should have been in 2012 because of policy uncertainty,” said Keith Hall, a senior research fellow at George Mason University’s Mercatus Center in Arlington, Virginia.

Economists and staffing companies are cautiously optimistic that part-time hiring and the low wages environment will fade away as the economy regains momentum, starting in the second half of this year and through 2014.

But businesses, accustomed to functioning with fewer workers, might not be in a hurry to change course. A study by financial analysis firm Sageworks found that profit per employee at privately held companies jumped to more than $18,000 in 2012 from about $14,000 in 2009.

“Private employers are either able to make more money with fewer employees or have been able to make more money without hiring additional employees,” said Sageworks analyst Libby Bierman. “The lesson learned for businesses during the recession was to have lean operations.”

 

The new ADP/Moody’s National Employment Report;

82% of all new job growth in August comes from Small and Mid-size Companies

Released, September 5, 2013

Private sector employment increased by 176,000 jobs from July to August, according to the August ADP National Employment Report®, which is produced by ADP®, a leading provider of human capital management solutions, in collaboration with Moody’s Analytics.  The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.  July’s job gains were revised down slightly to 200,000 from 198,000.

By Company Size

Small businesses: 71,000

1-19 employees 40,000

20-49 employees 31,000

Medium businesses: 74,000

50-499 employees 74,000

Large businesses: 32,000

500-999 employees 5,000

1,000+ employees 27,000

By Sector

Goods producing 11,000

Service providing 165,000

Industry Snapshot

Construction 4,000

Manufacturing 5,000

Trade/transportation/utilities 40,000

Financial activities 1,000

Professional/business services 50,000

Goods-producing employment rose by 11,000 jobs in August, at roughly half the growth rate of the previous month.  Construction payrolls added 4,000 jobs, while manufacturing payrolls increased by 5,000, rebounding from a decline in July.

Service-providing industries added 165,000 jobs in August, down from 176,000 in July.  Gains were broad-based across industries.  Among the service industries reported, professional/business services added the most jobs with 50,000 over the month.

Trade/transportation/utilities services saw an increase of 40,000 jobs, while financial activities showed a modest gain of 1,000 jobs, the category’s smallest monthly increase since June of 2012.

“The U.S. private sector added 176,000 jobs in August, as companies of all sizes expanded their payrolls over the previous month,” said Carlos A. Rodriguez, president and chief executive officer of ADP.  “The August job gains are in line with the monthly average over the last 12 months.”

Mark Zandi, chief economist of Moody’s Analytics, said, “It is steady as she goes in the job market.  Job gains in August were consistent with increases experienced over the past two-plus years.  There is little evidence that fiscal austerity and Health Care Reform have had a significant impact on the job market.”

(The September 2013 ADP National Employment Report will be released at 8:15 a.m. ET on October 2, 2013).

Due to the important contribution that small businesses make to economic growth, employment data that are specific to businesses with 49 or fewer employees is reported monthly in the ADP Small Business Report®, a subset of the ADP National Employment Report.

August 2013 Small Business Report Highlights*

Total Small Business Employment:              71,000

●By Size
►1-19 employees	40,000
►20-49 employees	31,000
●By Sector for 1-49 Employees
►Goods Producing	1,000
►Service Producing	69,000
●By Sector for 1-19 Employees
►Goods Producing
►Service Producing	42,000
●By Sector for 20-49 Employees
►Goods Producing	3,000
►Service Producing	28,000

* Sum of components may not equal total, due to rounding.

Bottom-line:  To my audience of recruiters, always remember this:  Our ‘bread and butter’, especially on the contingency side of the house, has historically been, and continues to be, small and medium-sized client companies.  Along with the large companies, these companies need to be in included in your niche!

Job Openings and Structural Unemployment

 On August 6^th, the BLS reported that there were 3,900,000 job openings on the last business day of June, up by 100,000 from May.  (The Job Openings and Labor Turnover Survey results for July 2013 are scheduled to be released on Tuesday, September 10^th, 2013).  The 3,900,000 reflects published openings comprised of jobs that are advertised either online or in print format.

The hires rate (3.1%) and separations rate (3.0%) also were little changed in June. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region.

As we recruiters know, that 3,900,000 number only represents 20% of the jobs currently available in the marketplace.  The other 80% of job openings are unpublished and are filled through networking or word of mouth or by using a RECRUITER.   So, those 3,900,000 published job openings now become a total of 19,500,000 published and hidden job orders.

In August there were 11,316,000 unemployed workers.  What was the main reason why those workers were unemployed?  Two Words:  Structural Unemployment.  If we can’t figure out how to educate and/or reeducate those 11,316,000 unemployed, then they will keep reappearing each month as a BLS unemployment statistic—as they have.  In the meantime, our recruitment marketplace flourishes!

Online Labor Demand up 86,800 in August, but flat thus far in 2013

September 4, 2013

• Employer labor demand remains stalled at the December 2012 level
• So far in 2013, gains in service occupations have been offset by declines in many professional and manufacturing occupations

Online advertised vacancies were up 86,800 in August to 4,974,900, according to The Conference Board Help Wanted OnLine® (HWOL) Data Seriesreleased today. The modest August gain was not enough to offset earlier months’ losses, leaving labor demand basically where it was eight months ago in December 2012. The July Supply/Demand rate stands at 2.4 unemployed for each vacancy, with a total of 6.6 million more unemployed workers than the number of advertised vacancies.

“This has not been a great year for labor demand,” said June Shelp, Vice President of The Conference Board. “While the churn in the labor market is there (with almost 5 million jobs advertised each month), the end results are disappointing. Thus far in 2013, ten of the 22 major occupational categories are down, offsetting increases in the 12 other groups.”

This year’s downturn in demand has hit higher-wage professional professions: architecture/engineering (-18,800); computer and math (-35,500); and management

(-11,800). The growth has been in relatively low-wage service occupations such as transportation and material moving (+36,200); food service workers (+18,800); and building and grounds workers (+8,300). Demand for production workers also turned down this year, dropping 11,200. In 2013 employers are, however, seeking more construction workers (+14,800) and legal workers (+8,400).

 

The August BLS Analysis

The unemployment rate is published by the Bureau of Labor Statistics, a division of the US Department of Labor.  The rate is found by dividing the number of unemployed by the total civilian labor force.  On September 6^th, 2013, the BLS published the most recent unemployment rate for August, 2013 of 7.3% (actually it is 7.278%, down .112% from 7.390% in July, 2013).

The unemployment rate was determined by dividing the unemployed of 11,316,000—down from the month before by 198,000—since August, 2012 (one year ago) this number has decreased by 1,167,000) by the total civilian labor force of 155,486,000 (down by 312,000 from July, 2013).  Since August 2012, our total civilian labor force has increased by 839,000 workers.

(The continuing ‘Strange BLS Math’ saga):  The BLS continues to increase the total Civilian Working Population—this time up to 245,959,000.  In one year’s time this population has increased by 2,393,000.  This is an decrease of 1,000 from last month’s increase.  The Civilian Working Population has increased each month…

 

 

And this month the BLS has decreased the Civilian Labor Force to 155,486,000 (down from July by 312,000).

 

Subtract the second number (‘civilian labor force’) from the first number (‘civilian working population’) and you get 90,473,000 ‘Not in Labor Force’.  That is a increase of 515,000 ‘Not in Labor Force’ in one month’s time!  Since August 2012, 1,554,000 US workers have vanished!  Where did those 1,554,000 potential workers disappear to in one year’s time?  I am assuming they still have to eat and pay their rent.  They still need money, don’t they?  The government tells us that these NILFs got discouraged and just gave up looking for a job.  My monthly recurring question is:  “If that is the case, how do they live when they don’t earn any money because they don’t have a job???”

 

Our Employment Participation Rate—the population 16 years and older working or seeking work—fell .2% to 63.2%.  This is the lowest Employment Participation Rate recorded since July and August 1978…a year and a half into President Carter’s administration, 35 years ago!  One year ago, our Participation Rate in August was 63.5%.

 

Final take on these numbers:  Fewer people looking for work will always bring down the unemployment rate.

 

Anyway, back to the point I am trying to make.  On the surface, these new unemployment rates are scary, but let’s look a little deeper and consider some other numbers.

The unemployment rate includes all types of workers—construction workers, government workers, etc.  We recruiters, on the other hand, mainly place management, professional and related types of workers.  That unemployment rate in August was 3.8% (this rate fell .3% from last month’s 4.1%).  Or, you can look at it another way.  We usually place people who have college degrees.  That unemployment rate in August was 3.5% (this rate also fell .3% from last month’s 3.8%).

Now stay with me a little longer.  This gets better.  It’s important to understand (and none of the pundits mention this) that the unemployment rate, for many reasons, will never be 0%, no matter how good the economy is.  Without boring you any more than I have already, let me add here that Milton Friedman (the renowned Nobel Prize-winning economist), is famous for the theory of the “natural rate of unemployment” (or the term he preferred, NAIRU, which is the acronym for Non-Accelerating Inflation Rate of Unemployment).  Basically, this theory states that full employment presupposes an ‘unavoidable and acceptable’ unemployment rate of somewhere between 4-6% with it.  Economists often settle on 5%, although the “New Normal Unemployment Rate” has been suggested to fall at 6.7%.

Nevertheless (if you will allow me to apply a ‘macro’ concept to a ‘micro’ issue), if this rate is applied to our main category of Management, Professional and Related types of potential recruits, and/or our other main category of College-Degreed potential recruits, we are below the 4-6% threshold for full employment…we find no unemployment!  None!  Zilch!

THE IMPORTANCE OF GDP

“The economic goal of any nation, as of any individual, is to get the greatest results with the least effort.  The whole economic progress of mankind has consisted in getting more production with the same labor…Translated into national terms, this first principle means that our real objective is to maximize production.  In doing this, full employment—that is, the absence of involuntary idleness—becomes a necessary by-product.  But production is the end, employment merely the means.  We cannot continuously have the fullest production without full employment.  But we can very easily have full employment without full production.”

—Economics in One Lesson, by Henry Hazlitt, Chapter X, “The Fetish of Full Employment”

On August 29^th, the Bureau of Economic Analysis announced the second-quarter, “second” estimate, of our real gross domestic product (GDP) — the output of goods and services produced by labor and property located in the United States.  GDP increased at an annual rate of 2.5% in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the “second” estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 1.1% (revised), down from 1.8% in the second estimate.

The Bureau emphasized that this GDP estimate is based on more complete source data than were available for the “advance” estimate issued last month.  In the advance estimate, the increase in real GDP was 1.7%.  With this second estimate for the second quarter, the increase in exports was larger than previously estimated, and the increase in imports was smaller than previously estimated.

The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed investment, and residential fixed investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the second quarter primarily reflected upturns in exports and in nonresidential fixed investment and a smaller decrease in federal government spending that were partly offset by an acceleration in imports and decelerations in private inventory investment and in PCE.

(The third estimate for the Second Quarter 2013 will be released on September 26, 2013).

The economy needs to expand at about 3% just to keep the unemployment rate from rising.  Two consecutive quarters of a falling GDP indicate Recession.

IT IS IMPOSSIBLE FOR UNEMPLOYMENT EVER TO BE ZERO

‘Unemployment’ is an emotional ‘trigger’ word…a ‘third rail’, if you will.  It conjures up negative thoughts.  But it is important to realize that, while we want everyone who wants a job to have the opportunity to work, unemployment can never be zero and, in fact, can be disruptive to an economy if it gets too close to zero.  Very low unemployment can actually hurt the economy by creating an upward pressure on wages which invariably leads to higher production costs and prices.  This can lead to inflation.  The lowest the unemployment rate has been in the US was 2.5%.  That was in May and June 1953 when the economy overheated due to the Korean War.  When this bubble burst, it kicked off the Recession of 1953.  A healthy economy will always include some percentage of unemployment.

There are five main sources of unemployment:

1. Cyclical (or demand-deficient) unemployment – This type of unemployment fluctuates with the business cycle.  It rises during a recession and falls during the subsequent recovery.  Workers who are most affected by this type of unemployment are laid off during a recession when production volumes fall and companies use lay-offs as the easiest way to reduce costs.  These workers are usually rehired, some months later, when the economy improves.

1. Frictional unemployment – This comes from the normal turnover in the labor force.  This is where new workers are entering the workforce and older workers are retiring and leaving vacancies to be filled by the new workers or those re-entering the workforce.  This category includes workers who are between jobs.

1. Structural unemployment – This happens when the skills possessed by the unemployed worker don’t match the requirements of the opening—whether those be in characteristics and skills or in location.  This can come from new technology or foreign competition (e.g., foreign outsourcing).  This type of unemployment usually lasts longer than frictional unemployment because retraining, and sometimes relocation, is involved.  Occasionally jobs in this category can just disappear overseas.

1. Seasonal unemployment – This happens when the workforce is affected by the climate or time of year.  Construction workers and agricultural workers aren’t needed as much during the winter season because of the inclement weather.  On the other hand, retail workers experience an increase in hiring shortly before, and during, the holiday season, but can be laid off shortly thereafter.

1. Surplus unemployment – This is caused by minimum wage laws and unions.  When wages are set at a higher level, unemployment can often result.  Why?  To keep within the same payroll budget, the company must let go of some workers to pay the remaining workers a higher salary.

Other factors influencing the unemployment rate:

1. Length of unemployment – Some studies indicate that an important factor influencing a workers decision to accept a new job is directly related to the length of the unemployment benefit they are receiving.  Just recently the government re-extended the eligibility for unemployment benefits from 26 weeks to as much as 73 weeks.  Studies suggest that this reduces the incentive of the unemployed to seek and accept less desirable jobs.

1. Changes in GDP – Since hiring workers takes time, the improvement in the unemployment rate usually lags behind the improvement in the GDP.

WHERE RECRUITERS PLACE

Now back to the issue at hand, namely the recruiting, and placing, of professionals and those with college degrees.

If you take a look at the past few years of unemployment in the August “management, professional and related” types of worker category, you will find the following rates:

August 2012                 4.5%

August 2011                 4.9%

August 2010                 5.1%

August 2009                 5.4%

August 2008                 3.3%

August 2007                 2.6%

August 2006                 1.8%

August 2005                 2.5%

August 2004                 2.9%

August 2003                 3.6%

August 2002                 3.4%

Here are the rates, during those same time periods, for “college-degreed” workers:

August 2012                 4.1%

August 2011                 4.3%

August 2010                 4.6%

August 2009                 4.7%

August 2008                 2.7%

August 2007                 2.1%

August 2006                 2.4%

August 2005                 2.1%

August 2004                 2.7%

August 2003                 3.1%

August 2002                 2.8%

So, while August’s 2013 rates for these two categories, 3.8% and 3.5%, respectively, are trending positively, when looking at the big picture, it’s not anything to be very happy about either—especially when we see how well we had it during the 2002-2008 time frame.  But regardless, these unemployment numbers usually include a good number of job hoppers, job shoppers and rejects.  We, on the other hand, are engaged by our client companies to find those candidates who are happy, well-appreciated, making good money and currently working and we entice them to move for even better opportunities—especially where new technologies are expanding.  This will never change.  And that is why, no matter the unemployment rate, we still need to market to find the best job orders and we still need to recruit to find the best candidates.

Below are the numbers for the over 25 year olds:

Less that H.S. diploma – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
7.7%	7.4%	8.2%	7.9%	8.4%	8.9%	8.6%	9.7%	9.8%	10.4%	10.6%	10.9%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
12.0%	12.6%	13.3%	14.8%	15.5%	15.5%	15.4%	15.6%	15.0%	15.5%	15.0%	15.3%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
15.2%	15.6%	14.5%	14.7%	15.0%	14.1%	13.8%	14.0%	15.4%	15.3%	15.7%	15.3%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
14.2%	13.9%	13.7%	14.6%	14.7%	14.3%	15.0%	14.3%	14.0%	13.8%	13.2%	13.8%

 

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
13.1%	12.9%	12.6%	12.5%	13.0%	12.6%	12.7%	12.0%	11.3%	12.2%	12.2%	11.7%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
12.0%	11.2%	11.1%	11.6%	11.1%	10.7%	11.0%	11.3%

 

H.S. Grad; no college – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
4.6%	4.7%	5.1%	5.0%	5.2%	5.2%	5.3%	5.8%	6.3%	6.5%	6.9%	7.7%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
8.1%	8.3%	9.0%	9.3%	10.0%	9.8%	9.4%	9.7%	10.8%	11.2%	10.4%	10.5%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
10.1%	10.5%	10.8%	10.6%	10.9%	10.8%	10.1%	10.3%	10.0%	10.1%	10.0%	9.8%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
9.4%	9.5%	9.5%	9.7%	9.5%	10.0%	9.3%	9.6%	9.7%	9.6%	8.8%	8.7%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
8.4%	8.3%	8.0%	7.9%	8.1%	8.4%	8.7%	8.8%	8.7%	8.4%	8.1%	8.0%

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
8.1%	7.9%	7.6%	7.4%	7.4%	7.6%	7.6%	7.6%

 

Some College; or AA/AS – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
3.7%	3.8%	3.9%	4.0%	4.3%	4.4%	4.6%	5.0%	5.1%	5.3%	5.5%	5.6%

 

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
6.2%	7.0%	7.2%	7.4%	7.7%	8.0%	7.9%	8.2%	8.5%	9.0%	9.0%	9.0%

 

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
8.5%	8.0%	8.2%	8.3%	8.3%	8.2%	8.3%	8.7%	9.1%	8.5%	8.7%	8.1%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
8.0%	7.8%	7.4%	7.5%	8.0%	8.4%	8.3%	8.2%	8.4%	8.3%	7.6%	7.7%

 

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
7.2%	7.3%	7.5%	7.6%	7.9%	7.5%	7.1%	6.6%	6.5%	6.9%	6.6%	6.9%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
7.0%	6.7%	6.4%	6.4%	6.5%	6.4%	6.0%	6.1%

 

BS/BS + – Unemployment Rate

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.1%	2.1%	2.1%	2.1%	2.3%	2.4%	2.5%	2.7%	2.6%	3.1%	3.2%	3.7%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
3.8%	4.1%	4.3%	4.4%	4.8%	4.7%	4.7%	4.7%	4.9%	4.7%	4.9%	5.0%

 

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
4.9%	5.0%	4.9%	4.9%	4.7%	4.4%	4.5%	4.6%	4.4%	4.7%	5.1%	4.8%

 

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
4.2%	4.3%	4.4%	4.5%	4.5%	4.4%	4.3%	4.3%	4.2%	4.4%	4.4%	4.1%

 

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.2%	4.2%	4.2%	4.0%	3.9%	4.1%	4.1%	4.1%	4.1%	3.8%	3.8%	3.9%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
3.7%	3.8%	3.8%	3.9%	3.8%	3.9%	3.8%	3.5%

 

Management, Professional & Related – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.2%	2.2%	2.1%	2.0%	2.6%	2.7%	2.9%	3.3%	2.8%	3.0%	3.2%	3.3%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
4.1%	3.9%	4.2%	4.0%	4.6%	5.0%	5.5%	5.4%	5.2%	4.7%	4.6%	4.6%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
5.0%	4.8%	4.7%	4.5%	4.5%	4.9%	5.0%	5.1%	4.4%	4.5%	4.7%	4.6%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
4.7%	4.4%	4.3%	4.0%	4.4%	4.7%	5.0%	4.9%	4.4%	4.4%	4.2%	4.2%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.3%	4.2%	4.2%	3.7%	4.0%	4.4%	4.8%	4.5%	3.9%	3.8%	3.6%	3.9%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
3.9%	3.8%	3.6%	3.5%	3.5%	4.2%	4.1%	3.8%

 

Or employed…(,000)

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
52,165	52,498	52,681	52,819	52,544	52,735	52,655	52,626	53,104	53,485	53,274	52,548

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
52,358	52,196	52,345	52,597	52,256	51,776	51,810	51,724	52,186	52,981	52,263	52,131

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
52,159	52,324	52,163	52,355	51,839	51,414	50,974	50,879	51,757	51,818	52,263	51,704

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
51,866	52,557	53,243	53,216	52,778	52,120	51,662	51,997	52,665	52,864	52,787	52,808

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
53,152	53,208	53,771	54,055	54,156	53,846	53,165	53,696	54,655	55,223	54,951	54,635

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
54,214	54,563	54,721	54,767	54,740	54,323	54,064	54,515

 

And unemployed…(,000)

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
1,164	1,159	1,121	1,088	1,407	1,478	1,585	1,779	1,539	1,647	1,786	1,802

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
2,238	2,137	2,292	2,164	2,373	2,720	3,034	2,925	2,859	2,593	2,530	2,509

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
2,762	2,637	2,600	2,464	2,450	2,644	2,687	2,762	2,381	2,417	2,525	2,468

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
2,557	2,435	2,381	2,196	2,419	2,598	2,742	2,671	2,450	2,410	2,336	2,303

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
2,410	2,336	2,330	2,062	2,275	2,472	2,666	2,556	2,245	2,170	2,077	2,221

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
2,211	2,164	2,020	1,980	1,990	2,358	2,286	2,130

 

For a total Management, Professional & Related workforce of…(,000)

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
53,329	53,657	53,802	53,907	53,951	54,213	54,240	54,405	54,643	55,132	55,060	54,350

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
54,596	54,333	54,637	54,761	54,629	54,496	54,844	54,649	55,045	55,574	54,793	54,640

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
54,921	54,961	54,763	54,819	54,289	54,058	53,661	53,641	54,138	54,235	54,788	54,172

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
54,423	54,992	55,624	55,412	55,197	54,718	54,404	54,668	55,115	55,274	55,123	55,111

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
55,562	55,544	56,101	56,117	56,431	56,318	55,831	56,252	56,900	57,393	57,028	56,856

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
56,425	56,727	56,741	56,747	56,730	56,681	56,350	56,645

Management, Business and Financial Operations – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.3%	2.3%	2.2%	2.1%	2.7%	2.5%	2.6%	2.8%	2.8%	3.0%	3.6%	3.9%

 

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
4.6%	4.5%	4.5%	4.4%	4.6%	4.8%	4.9%	5.0%	5.2%	5.4%	5.4%	5.2%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
5.2%	5.1%	5.4%	5.1%	4.9%	4.8%	4.7%	4.9%	4.3%	5.0%	5.5%	5.7%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
5.3%	4.9%	4.8%	4.6%	4.9%	4.6%	4.6%	4.6%	4.6%	4.7%	4.6%	4.4%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.5%	4.4%	4.4%	4.0%	4.1%	3.8%	3.8%	3.7%	3.5%	3.6%	3.8%	4.1%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
4.0%	3.9%	3.5%	3.5%	3.8%	3.5%	3.1%	3.4%

 

Professional & Related – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.1%	2.1%	2.0%	2.0%	2.5%	2.9%	3.2%	3.6%	2.8%	3.0%	3.0%	2.9%

 

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
4.9%	4.6%	4.3%	4.1%	4.3%	5.0%	5.2%	5.3%	4.4%	4.1%	4.1%	3.8%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
4.3%	4.1%	3.9%	3.5%	4.0%	4.9%	5.3%	5.1%	4.4%	4.1%	4.0%	4.0%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.2%	4.1%	4.0%	3.5%	4.0%	4.8%	5.5%	5.2%	4.3%	3.9%	3.5%	3.8%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
3.8%	3.8%	3.6%	3.4%	3.3%	4.6%	4.7%	4.0%

 

Sales & Related – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
5.2%	5.2%	4.8%	4.3%	5.1%	5.6%	6.2%	6.3%	5.7%	6.1%	6.5%	7.0%

 

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
7.7%	8.4%	8.9%	8.6%	8.9%	9.1%	8.3%	8.7%	8.9%	9.5%	9.1%	8.9%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
10.1%	10.2%	9.7%	9.2%	9.6%	9.4%	10.1%	9.0%	9.4%	9.1%	8.8%	8.3%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
9.3%	9.0%	8.5%	8.5%	9.4%	9.7%	9.4%	8.6%	9.4%	8.2%	7.8%	7.7%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
8.2%	7.9%	8.1%	7.6%	7.9%	8.4%	8.3%	8.6%	7.9%	7.0%	7.3%	7.0%

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
8.5%	8.2%	7.7%	6.9%	7.1%	6.7%	6.9%	7.2%