Bob Marshall’s March 2015 BLS Analysis for Recruiters; 4/3/15
March BLS Preface
Bob Marshall – Training/Coaching Updates:
F-O-R-T-U-N-E Personnel Consultants, FPC University, Webinar Presentation, Thursday, April 9, 2015, 11am (eastern)
I will present a one-hour webinar plus Q&A on Thursday, April 9, 2015 for the FPC University program. The title of this presentation will be “How to Inject Urgency into the Candidate”. The outline and more details will follow.
The Newport Group (TNG), Encinitas, CA, June 10-11, 2015
I will conduct my third training visit to The Newport Group (TNG) in Encinitas, CA on Wednesday and Thursday, June 10-11, 2015. This visit will consist of formal presentations and desk-level coaching.
I just revised my Silver Coaching Plan and want to see how many ‘takers’ I get who want to double their production at a more affordable coaching price point.
TBMG Silver Coaching Plan, (revised, April 2015)
*An affordable plan for those you want the accountability factor, but only need to meet twice monthly;
*Twice per month telephone meetings—basically every other week (although I will be available at any time should the need arise);
*Numbers reported to me on a weekly basis (recommended);
*$600 per month; 3-month commitment;
*Can be paid monthly at $600 per month; or $1800 total for the three month term;
*The goal with this plan will be to double current levels of production;
And that is basically that!
- COACHING – 3-month, every other week, Silver Plan
This is a 3-month commitment plan. In this plan, I will be available to you for 2 separate meetings, up to one hour, to be parceled out on an every other week basis, but must be used within a 4-5 week period. Admission into the Illuminati Think Tank series is included. Prepaid via PayPal.
$600 per month (Three Month Commitment)
McDonough, GA 30252-2513
You can also read the descriptions of my other coaching plans, and all of my products, on my website @ www.themarshallplan.org or you can reach me directly at 770-898-5550 or email me @ firstname.lastname@example.org.
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.
Hiring expectations rise, recruiting difficulty at 4-year high, SHRM says
Daily News, April 2, 2015
US manufacturing and service sectors are expected to reach 4-year highs for hiring rates in the month of April, according to the leading indicators of a national employment report released today by the Society for Human Resource Management. Hiring expectations in US manufacturing rose for the 13th straight month in April when compared with the same month in the previous year, and service-sector hiring expectations also increased.
The report’s survey found 59.8% of manufacturing companies plan to hire in April while 7.8% plan to reduce their workforces for a net increase of 52.0%, up from a net increase of 46.8% in April 2014.
Among service-sector companies, 53.8% plan to add staff in April and 8.7% plan to cut their workforces for a net increase of 45.1%, up from a net increase of 35.3% percent in April 2014.
Additionally, March marked the 11th consecutive month recruiting difficulty reached a 4-year high for the month. A net of 24.8% of manufacturing respondents said they had more difficulty with recruiting in March, up from 12.2% in the same month in 2014. A net of 25.3% of service-sector organizations also reported difficulty, up from 20.0% in March of last year.
The survey also found many organizations are still keeping new-hire compensation flat, but the net total in services represented a 4-year high for the month of March.
In the manufacturing sector, a net total of 7.3% of respondents reported raising new-hire compensation in March, up from 5.7% in March 2014. In the service sector, a net total of 17.9% of companies increased new-hire compensation in March, up from 6.4% in the same month a year ago.
The report is based on a survey of human resource executives at more than 500 manufacturing and 500 service-sector firms.
H-1B visas expected to exceed cap in first five days
Daily News, March 13, 2015
US Citizenship and Immigration Services will begin accepting H-1B petitions on April 1 and expects to receive more petitions than the H-1B cap during the first five business days of this year’s program. Federal legislation limits the amount of H-1B visas to 65,000 for fiscal year 2016, plus 20,000 more reserved for workers with a US master’s degree or higher, for a total of 85,000.
If USCIS receives an excess of petitions during the first five business days, the agency will use a lottery system to randomly select the number of petitions required to meet the cap. USCIS will reject all unselected petitions that are subject to the cap as well as any petitions received after the cap has closed.
USCIS used the lottery for the FY 2015 program last April when the number of visas requested exceeded the annual caps in the first week.
Dramatic shift in US workforce demographics, report finds
Daily News, March 27, 2015
Major demographic shifts in the US since 2001 have led to a workforce that looks quite different today, according to The Changing Face of U.S. Jobs report released by CareerBuilder. The report tracks the changing composition of jobs by gender, race and age from 2001 to 2014.
Men occupy a broader array of career fields, the number of occupations heavily represented by workers 55 and older has more than doubled, and white workers lost share of employment in each of the 50 highest paying jobs, the report found.
“We need to move beyond the simplistic, antiquated notions of pink-collar, blue-collar and white-collar jobs and focus on bringing the best people, regardless of gender, into the roles required of a healthy economy,” said Rosemary Haefner, chief human resources officer for CareerBuilder. “Men are contributing in a wider variety of occupations than at the turn of the century, and as women continue to make up a larger share of the workforce, we must ensure they have the same access and opportunity for success in all professions.”
Key takeaways from the report include:
- Since 2001, female workers lost share of employment in 48 out of the 50 highest paying jobs.
- Millennials are performing jobs formerly held by teenage workforce.
- College graduation classes are more diverse, contributing to workforce gains for Hispanic/Latino and Asian workers.
- Black/African American workers gained in 44% of the 50 highest paying jobs.
The most dramatic demographic shift in workforce composition is age, according to the report. The teenage workforce is 33% smaller than in 2001, while the age 55 and older workforce grew 40%. Jobs for young professionals age 22-34 grew only 4%, while employment for workers age 35-54 shrunk by 1%.
“The implications of the aging workforce boil down to a simple question: As workers retire, will there be enough qualified candidates to fill the vacated jobs?” said Matt Ferguson, CEO of CareerBuilder. “When employment growth projections and replacement needs are taken into account, millions of high and middle-skill occupations will be available in the next decade. This will require workforce planners and talent acquisition executives to evaluate succession plans and candidate supply chains. With the right labor market data in hand, however, it’s a manageable task.”
Small businesses optimism hits new high, survey says
Daily News, March 23, 2015
Optimism among small business owners hit a one-year high in March, according to the SurePayroll Small Business Scorecard survey for March, with 81% saying they are optimistic about the small business economy and 89% saying business is the same or better than last year.
In addition, the average paycheck increased 0.1% in March, gaining 0.7% for the year to date. Hiring is also slightly higher year to date, up 0.1%, despite a slight drop in March.
“The things that may have worried small business owners last year seem to be worrying them less this year, and the positives seem more promising,” said SurePayroll General Manager Andy Roe. “We can’t predict what pitfalls may lie ahead the rest of the year, but for optimism to be this high, and hiring and pay to be up, that’s an encouraging first quarter.”
SurePayroll’s Scorecard compiles data from more than 40,000 small businesses and exclusively reflects the trends affecting businesses with one to 10 employees. The average business reflected has six employees. SurePayroll Inc. provides online payroll services to small businesses. It is a subsidiary of Paychex Inc.
Job market study finds inequality of skill shortages across US
Daily News, March 6, 2015
Traditional metrics for measuring US unemployment do not accurately represent the true nature of the employment market, according to a study released by Wanted Technologies.
The report, “Inequality of Skill Shortages Across US Occupations and Locations,” measured job vacancy and unemployment rates for the pre- and post-recession periods by occupation and region. The research found companies in industries that did not typically focus on software-driven efficiencies before the 2008-2009 recession have emerged with new needs for those skills. However, many of these organizations reside in regions where the base of available workers does not match the new demand.
“Looking at the unemployment numbers as we have historically tells a very small part of the story, and if we continue to look through this limiting lens, it will have a direct impact on economic recovery and job growth,” said Wanted Technologies President and CEO Meredith Amdu.
Findings from the report include:
- The employment recovery and emerging skills gap in key occupations are not playing out evenly. Miami, Los Angeles, and Denver metropolitan areas show the highest skills gaps, while Minneapolis, San Jose/San Francisco, and Boston emerged relatively stable and able to meet demand.
- Minneapolis and Silicon Valley are well positioned for current market needs because they have been attracting and maintaining skills consistent with the need in those metropolitan statistical areas. But New York and Los Angeles are facing much larger gaps.
- Construction and legal occupations did not face a skills gap after the recession. Hiring has stabilized to pre-recession levels with little subsequent gap in the supply of appropriately skilled employees.
- A skills gap in STEM jobs was not apparent until 2013 but continues today. In the first two years of recovery post recession, the demand in STEM fields grew twice as fast as the overall average demand and, as of 2013, supply could not continue fast enough to keep up with demand.
The new ADP/Moody’s National Employment Report: 90% of all new job growth in March, 2015 came from Small and Mid-size Companies
April 1, 2015
Private sector employment increased by 189,000 jobs from February to March (down from the increase of 212,000 jobs last month), according to the March ADP National Employment Report®, which is produced by ADP®, a leading global provider of Human Capital Management (HCM) 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.
By Company Size
Small businesses: 108,000
1-19 employees 57,000
20-49 employees 51,000
Medium businesses: 62,000
50-499 employees 62,000
Large businesses: 19,000
500-999 employees 7,000
1,000+ employees 12,000
Goods producing 5,000
Service providing 184,000
Financial activities 16,000
Professional/business services 40,000
Payrolls for businesses with 49 or fewer employees increased by 108,000 jobs in March, up from 103,000 in February. Employment among companies with 50-499 employees increased by 62,000 jobs, up from 57,000 the previous month. Employment at large companies – those with 500 or more employees – decreased in February adding 19,000 jobs, down sharply from 53,000. Companies with 500-999 employees added 7,000 jobs, down from February’s 11,000. Companies with over 1,000 employees added 12,000 jobs, down from 43,000 the previous month.
Goods-producing employment rose by only 5,000 jobs in March, down from 22,000 jobs gained in February. The construction industry added 17,000 jobs, down from 28,000 last month. Meanwhile, manufacturing lost 1,000 jobs in March, after adding 2,000 in February.
Service-providing employment rose by 184,000 jobs in March, down from 192,000 in February. The report indicates that professional/business services contributed 40,000 jobs in March, up from February’s 34,000. Expansion in trade/transportation/utilities grew by 25,000, a decline from February’s 32,000. The 16,000 new jobs added in financial activities is a drop from last month’s 19,000.
“March job gains came in under 200,000 for the first time since January of last year,” said Carlos Rodriguez, president and chief executive officer of ADP. “The decline was centered in the largest companies, those with 1000 or more employees.”
Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth took a step back in March. The fallout from the collapse in oil prices and surge in value of the dollar is hitting the job market. Despite the slowdown, underlying job growth remains strong enough to reduce labor market slack.”
(The April 2015 ADP National Employment Report will be released at 8:15 a.m. ET on April 29, 2015).
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 each month in the ADP Small Business Report®, a subset of the ADP National Employment Report.
March 2015 Small Business Report Highlights
Total Small Business Employment: 108,000
|●By Sector for 1-49 Employees|
|●By Sector for 1-19 Employees|
|●By Sector for 20-49 Employees|
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 Labor Turnover Summary – January 2015
On March 10th, the BLS reported that there were 5,000,000 job openings on the last business day of January, little changed from 4,900,000 in December. Hires decreased to 5,000,000 in January and separations were little changed at 4,800,000. Within separations, the quits rate was little changed at 2.0% and the layoffs and discharges rate was unchanged at 1.2%. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by four geographic regions. The release also includes 2014 annual estimates for hires and separations. The annual number of hires, quits, layoffs and discharges, and other separations increased in 2014.
There were 5,000,000 job openings on the last business day of January, little changed from December. This was the highest level of job openings since January 2001. The job openings rate for January was 3.4%. The number of job openings was little changed for total private and government in January. Job openings increased for accommodation and food services and in the West region.
The number of job openings (not seasonally adjusted) increased over the 12 months ending in January for total nonfarm, total private, and government. Job openings increased over the year for many industries including professional and business services, health care and social assistance, and accommodation and food services. Job openings decreased over the year in mining and logging. The number of openings increased over the year in all four regions.
There were 5,000,000 hires in January, down from December. The hires rate in January was 3.5%. The number of hires decreased for total private in January and was little changed in government. Hires decreased over the month in construction and in the Northeast region.
Over the 12 months ending in January, the number of hires (not seasonally adjusted) increased for total nonfarm and total private, and was little changed for government. Hires increased over the year in retail trade and in finance and insurance. Hires decreased over the year in educational services. In the regions, hires increased over the year in the Midwest.
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising. Over the 12 months ending in January 2015, hires totaled 59,100,000 and separations totaled 56,000,000, yielding a net employment gain of 3,100,000. These figures include workers who may have been hired and separated more than once during the year.
(The Job Openings and Labor Turnover Survey results for February 2015 are scheduled to be released on Tuesday, April 7th, 2015).
As we recruiters know, that 5,000,000 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 5,000,000 published job openings now become a total of 25,000,000 published and hidden job orders.
In March there were 8,575,000 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 8,575,000 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 Edged Up 15,200 in March
April 1, 2015
- First quarter 2015 showed strong growth resulting from large gains in both January and February
- Demand for Oil and Gas Extraction workers plummets as oil prices fall
Online advertised vacancies increased 15,200 to 5,466,400 in March, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The February Supply/Demand rate stands at 1.60 unemployed for each advertised vacancy, with a total of 3,300,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was 8,700,000 in February.
“Online demand growth over the first quarter of 2015 at +349,000 has been the strongest quarterly growth in 8 years,” said Gad Levanon, Managing Director, Macroeconomic and Labor Market Research. “The growth has been well-balanced across the regions of the country and the major occupational groups, reflecting an overall healthy employer demand so far in 2015.”
In March, the Professional category saw the most gains with Management (6,500), Business and Finance (4,200), Computer and Math (8,800) and Healthcare (5,200). The Services/Production category saw losses in Transportation (−30,000), Building and Grounds (−11,800) and Installation and Repair (−8,500).
The Conference Board Help Wanted OnLine® Data Series (HWOL) measures the number of new, first-time online jobs and jobs reposted from the previous month for over 16,000 Internet job boards, corporate boards and smaller job sites that serve niche markets and smaller geographic areas.
(The April 2015 Conference Board Help Wanted OnLine® (HWOL) Data Series will be released at 10:00 AM ET on Wednesday, May 6, 2015).
In March, 2015 the regular unemployment number was unchanged at 5.5%, and the broader U-6 measure edged down to 10.9%, slightly less than twice as high as the regular unemployment figure.
The above 10.9% is referred to as the U6 unemployment rate (found in the monthly BLS Employment Situation Summary, Table A-15; Table A-12 in 2008 and before). It counts not only people without work seeking full-time employment (the more familiar U-3 rate), but also counts “marginally attached workers and those working part-time for economic reasons.” Note that some of these part-time workers counted as employed by U-3 could be working as little as an hour a week. And the “marginally attached workers” include those who have gotten discouraged and stopped looking, but still want to work. The age considered for this calculation is 16 year and over.
Here is a look at the March U-6 numbers for the past 12 years:
March 2014 12.7%
March 2013 13.8%
March 2012 14.5%
March 2011 15.7%
March 2010 16.8%
March 2009 15.6%
March 2008 9.1%
March 2007 8.0%
March 2006 8.0%
March 2005 9.1%
March 2004 9.9%
March 2003 10.0%
The March 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 April 3rd, 2015, the BLS published the most recent unemployment rate for March, 2015 of 5.5% (actually it is 5.465% down by .080% from 5.545% in February, 2015).
The unemployment rate was determined by dividing the unemployed of 8,575,000 (—down from the month before by 130,000—since March, 2014 this number has decreased by 1,809,000) by the total civilian labor force of 156,906,000 (down by 96,000 from February, 2015). Since March 2014, our total civilian labor force has increased by 726,000 workers.
(The continuing ‘Strange BLS Math’ saga): The BLS continues to increase the total Civilian Noninstitutional Population—this time up to 250,080,000. This is an increase of 191,000 from last month’s increase. In one year’s time, this population has increased by 2,822,000. The Civilian Noninstitutional Population has increased each month by…)
|Up from February 2015||by||191,000|
|Up from January 2015||by||176,000|
|Up from December 2014||by||696,000|
|Up from November 2014||by||143,000|
|Up from October 2014||by||187,000|
|Up from September 2014||by||211,000|
|Up from August 2014||by||217,000|
|Up from July 2014||by||206,000|
|Up from June 2014||by||209,000|
|Up from May 2014||by||192,000|
|Up from April 2014||by||183,000|
|Up from March 2014||by||181,000|
|Up from February 2014||by||173,000|
|Up from January 2014||by||170,000|
|Up from December 2013||by||170,000|
|Up from November 2013||by||178,000|
|Up from October 2013||by||186,000|
|Up from September 2013||by||213,000|
|Up from August 2013||by||209,000|
|Up from July 2013||by||203,000|
|Up from June 2013||by||204,000|
|Up from May 2013||by||189,000|
|Up from April 2013||by||188,000|
|Up from March 2013||by||180,000|
|Up from February 2013||by||167,000|
|Up from January 2013||by||165,000|
|Up from December 2012||by||313,000|
|Up from November 2012||by||176,000|
|Up from October 2012||by||191,000|
|Up from September 2012||by||211,000|
|Up from August 2012||by||206,000|
|Up from July 2012||by||212,000|
|Up from June 2012||by||199,000|
|Up from May 2012||by||189,000|
|Up from April 2012||by||182,000|
|Up from March 2012||by||180,000|
|Up from February 2012||by||169,000|
|Up from January 2012||by||335,000|
|Up from December 2011||by||2,020,000|
And this month the BLS has decreased the Civilian Labor Force to 156,906,000 (down from January by 96,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 93,174,000 ‘Not in Labor Force’—up by 276,000 from last month’s 92,898,000. Since March, 2014, 2,098,000 US workers have vanished! Where did those 2,098,000 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? Are they ALL relying on the government to support them??”
This month our Employment Participation Rate—the population 16 years and older working or seeking work—dropped again to 62.7%. This rate ties the historically low rate of 62.7% recorded in September and December of last year—and, before that, the rate recorded in February 1978—one year into President Jimmy Carter’s term of office, 36 years ago!
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 March was 2.4% (this rate dropped .3% from last month’s 2.7%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in March was 2.5% (this rate dropped by .2% from last month’s 2.7%).
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 well below the 4-6% threshold for full employment…we find no unemployment! None! Zilch! A Big Goose Egg!
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 March 27th, the Bureau of Economic Analysis (BEA) announced the real gross domestic product (GDP) — the value of the production of goods and services in the United States, adjusted for price changes — increased at an annual rate of 2.2% in the fourth quarter of 2014, according to the “third” estimate released by the BEA. In the third quarter, real GDP increased 5.0%.
The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was also 2.2%. While increases in exports and in personal consumption expenditures (PCE) were larger than previously estimated and the change in private inventories was smaller, GDP growth is unrevised, and the general picture of the economy for the fourth quarter remains the same.
The increase in real GDP in the fourth quarter reflected positive contributions from PCE, nonresidential fixed investment, exports, state and local government spending, and residential fixed investment that were partly offset by negative contributions from federal government spending and private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, a deceleration in nonresidential fixed investment, and a larger decrease in private inventory investment that were partly offset by accelerations in PCE and in state and local government spending.
*The economy needs to expand at about 3% to keep the unemployment rate from rising.
Real GDP increased 2.4% in 2014 (that is, from the 2013 annual level to the 2014 annual level), compared with an increase of 2.2% in 2013.
The increase in real GDP in 2014 reflected positive contributions from PCE, nonresidential fixed investment, exports, state and local government spending, private inventory 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 growth in 2014 primarily reflected an acceleration in nonresidential fixed investment, a smaller decrease in federal government spending, and accelerations in PCE and in state and local government spending that were partly offset by an acceleration in imports and a deceleration in residential fixed investment.
(The “advance” estimate for the 1st Quarter 2015 GDP will be released on April 29th, 2015).
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:
- 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.
- 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.
- 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.
- 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.
- 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:
- 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. As of August 25th, workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although 8 states provide fewer weeks and 2 provide more. (Emergency Unemployment Compensation, a temporary federal program that provided additional weeks of benefits to workers who exhausted their regular state UI before finding a job, expired at the end of 2013 and efforts to revive it have been unsuccessful so far.) Studies suggest that additional weeks of benefits reduce the incentive of the unemployed to seek and accept less desirable jobs.
- 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 March “management, professional and related” types of worker category, you will find the following rates:
March 2014 3.3%
March 2013 3.6%
March 2012 4.2%
March 2011 4.3%
March 2010 4.7%
March 2009 4.2%
March 2008 2.1%
March 2007 1.8%
March 2006 2.1%
March 2005 2.3%
March 2004 2.7%
March 2003 2.9%
March 2002 2.8%
Here are the rates, during those same time periods, for “college-degreed” workers:
March 2014 3.4%
March 2013 3.8%
March 2012 4.2%
March 2011 4.4%
March 2010 4.8%
March 2009 4.4%
March 2008 2.1%
March 2007 1.8%
March 2006 2.2%
March 2005 2.4%
March 2004 2.9%
March 2003 3.1%
March 2002 2.8%
So, while March’s 2015 rates for these two categories, 2.4% and 2.5%, respectively, are trending very 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 2005-2008 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 possible job orders and we still need to recruit to find the best possible candidates.
Below are the numbers for the over 25 year olds:
Less that H.S. diploma – Unemployment Rate
H.S. Grad; no college – Unemployment Rate
Some College; or AA/AS – Unemployment Rate
BS/BS + – Unemployment Rate
Management, Professional & Related – Unemployment Rate
For a total Management, Professional & Related workforce of…(,000)
Management, Business and Financial Operations – Unemployment Rate
Professional & Related – Unemployment Rate
Sales & Related – Unemployment Rate