Bob Marshall’s March 2016 BLS Analysis for Recruiters; 4/1/16
March BLS Preface
TBMG Coaching Updates and News
Bob Marshall – Training/Coaching Updates:
Mike Gionta’s free 7th Annual Recruiting Firm Owner Telesummit, March 24, 2016
I gave my presentation on Thursday afternoon, March 24th, at 2:15pm, Eastern Time, at Mike Gionta’s free 7th Annual Recruiting Firm Owner Telesummit which ran from March 22-25, 2016.
The title of my presentation was: “The Opportunity Cost in Not Quitting the Dead Horse Projects.”
With just over 2,500 attendees, we can safely say that Mike’s virtual summit is the world’s largest permanent placement training event.
To purchase recordings from the Telesummit, contact Leesa Renee Hall, Virtual Event Manager, 2016 Recruiting Firm Owner Summit @ email@example.com or contact me.
Top Echelon, FREE Recruiter Training Webinar, May 10, 2016
My next Top Echelon presentation will be on Tuesday afternoon, May 10, 2016, at 1pm, Eastern Time.
The title of my presentation was: “The Opportunity Cost in Not Quitting the Dead Horse Projects.”
Agent HR Recruiting Group, ACES (Agent Continuing Education Series) Event, Virtual Presentation, Thursday, May 19, 2016
I have confirmed that I will conduct a one-hour virtual presentation plus Q&A on Thursday, May 19, 2016, at 1pm, Eastern Time. If you are a member of ARG, contact Robert Brennan, President, at 727-350-1994 x102, or email at firstname.lastname@example.org, for connection details.
The exact title of my presentation will be determined at a later date.
Training Swing through Indianapolis, June 15-30, 2016
* Special Indiana Note: For those of you in the Indianapolis area, if you are interested in my in-office training (individual and desk-level) and are available for that training during June 15-30, please let me know for a special offer. Since I will be in Indianapolis anyway, I will offer a 50% discount on my usual fees and no charge for my airfare. First come, first served, so contact me for specific details as soon as possible. Thanks!
The Nebraska Association of Personnel Consultants (NAPC) Fall Seminar, Omaha, Nebraska, September 23, 2016
I will be presenting to the NAPC Fall Seminar on Friday, September 23rd, 2016, in Omaha, Nebraska. My presentations will run from 9:00 am to 3:00 pm. The titles of the presentations will include: “3 Proven Methods to landing New Clients”; “How to Inject Urgency into the Candidate”; and “How to Inject Urgency into the Hiring Process”.
* Special Nebraska Note: For those of you in the Omaha area, if you are interested in my in-office training (individual and desk-level) and are available for that training during September 19-26, please let me know for a special offer. Since I will be in Omaha for my NAPC presentation, I will offer a 50% discount on my usual fees and no charge for my airfare. First come, first served, so contact me for specific details as soon as possible. Thanks!
Taking the first step…
Over 36 years ago I began a career that turned out to be the most dynamic and rewarding professional move I have ever made. With the opportunity to earn an unlimited income at my fingertips, I began my career as a Recruiter.
Soon I became a student of the business and transitioned into Coaching. I traveled extensively and learned and listened and I packaged my material in a unique way. I studied many of the top producers in the recruiting industry and developed a series of training tools based on their proven success—training techniques that work time and time again.
I developed these tools and coaching techniques to help others achieve their goals as top producing professional recruiters. I continue to base all of my coaching and training tools on the same “nuts and bolts” approach I used as a recruiter.
I realize that taking that first step to engage a Coach to help you reach a higher level of production is not as easy as it sounds. After all, your training investment – and your time – are important and deserve every consideration. I share your feelings. I believe that how you approach your recruitment career matters…that you should get what you pay for, and then some…that you should enjoy your time with your Coach as you are benefiting from it…and that you should never settle for the ordinary.
If you are ready to take the first step, you can read descriptions of my coaching plans, and all of my products, on my website @ www.themarshallplan.org. Then, call me directly at 770-898-5550 or email me @ email@example.com.
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.
US economic growth outlook little changed in last 3 months
Daily News, March 23, 2016
Despite volatility in financial markets, the outlook for the US economy has not changed much over the past 3 months, according to a report released today by TD Economics. Weak global growth remains a key headwind, but domestic demand continues to be supported by a healthy labor market and low energy prices.
Led by household and business spending, TD Economics projects US economic growth of 2% in 2016 and 2.2% in 2017.
“While this pace may seem underwhelming, it will be more than sufficient to continue to eat up slack in the American economy, maintain upward pressure on inflation and push the unemployment rate lower,” said TD Bank Chief Economist Beata Caranci. “The Federal Reserve will have good cause to raise rates 2 more times this year, even though market participants have currently sidelined those expectations.”
The most encouraging element in recent data has been the ongoing resiliency in the labor market, according to the report. Job growth over the first two months of 2016 averaged 207,000, similar to its progress since the recovery began.
“The good news does not end there,” Caranci said. “Drawn in by better job prospects, more and more people appear to be joining the workforce, heralding a more fulsome labor market recovery.”
With job growth expected to exceed 190,000 a month over the remainder of this year, TD Economics expects the unemployment rate to fall to 4.7% by the end of this year and hit a low of 4.6% in the second half of 2017.
TD Economics provides analysis of global economic performance and forecasting, and is an affiliate of TD Bank, N.A.
Feds again expect to reach H-1B cap within 1 week
Daily News, March 16, 2016
US Citizenship and Immigration Services will begin accepting H-1B petitions on April 1 and expects to exceed the H-1B cap during the first 5 business days of this year’s program. The congressionally mandated cap on H-1B visas for fiscal year 2017 is 65,000. However, the first 20,000 H-1B petitions filed for individuals with a US master’s degree or higher are exempt from the 65,000 cap.
If USCIS receives an excess of petitions during the first 5 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 system for the program last year and the number of visas requested exceeded the annual caps in the 1st week.
Hiring for marketing professionals will remain stable in 2016
Daily News, March 14, 2016
Hiring levels for marketing professionals will remain relatively stable from 2015 to 2016, with a small potential for slight to moderate growth in the job market, according to a study released by McKinley Marketing Partners.
More than half of hiring managers, 53%, plan to hire the same number of marketing professionals in 2016. 28% plan to hire more marketing professionals and 19% plan to hire fewer than in previous years.
The study also found digital marketing is becoming an essential part of the majority of marketing roles — no longer a job in and of itself. Last year, 90% of all client requirements requested of McKinley Marketing Partners required digital marketing experience and/or analytic skills.
Half of the client requirements requested in 2015 required some aspect of digital marketing experience, and 40% required some aspect of strategic thinking or analytic skills. A total of 28% required both digital and strategic marketing experience — and those numbers are already on the rise in 2016, according to the report.
“More and more often, we’re seeing that marketers who once considered themselves ‘traditional marketers’ are using digital marketing skills in their daily job duties,” said McKinley Marketing Partners President and CEO Michelle Boggs. “The fact is that digital is — or soon will be — part of every marketing job in today’s market. Companies must strengthen their multi-functional marketing teams to keep up with the standards of our current economy and job market.”
Key findings of the 2016 survey also include:
- Digital marketers were highest in demand in 2015, while SEO/SEM and project manager hiring has decreased.
- Hiring of marketing professionals will increase slightly in 2016.
- Data analysts and upper-level managers continue to be in high demand, despite the outsourcing of other job duties.
- Job candidates who possess “soft skills” such as problem solving and the ability to efficiently and persuasively articulate thoughts have the advantage.
The study polled nearly 200 directors, VPs, C-level marketing executives, hiring managers and others in the position to make decisions about marketing talent for their 2015 hiring decisions and projected hiring needs for 2016. Participants in the survey represented a range of industries, including computers and telecommunication, financial services, retail, nonprofit and education, media and healthcare.
Healthcare jobs at high in terms of percent of total employment
Daily News, March 14, 2016
Healthcare gained 38,100 new jobs in February, the 6th straight month of annual growth above 3%, according to the Health Sector Economic Indicators briefs released by the Altarum Institute’s Center for Sustainable Health Spending.
Hospitals added 10,600 jobs, comparable to the 24-month average. Consistent with recent patterns, health jobs grew 3.2% year over year while non-health jobs grew 1.7%, putting the health share of total employment at a new all-time high of 10.71%, according to the report.
“Health spending growth in 2015 was considerably higher than the previous six years, yet it decelerated throughout the year, indicating that the 2015 surge was temporary,” said Charles Roehrig, founding director of the center. “Quarterly Services Survey data released yesterday confirms this story for the final quarter of 2015. While the return to slower growth is comforting, we remain concerned about what rate of growth will be slow enough to be sustainable long term.”
Altarum Institute is a nonprofit health systems research and consulting organization. The research analyzed data from the Bureau of Labor Statistics Employment Situation report.
Physicians, lawyers and R&D managers highest paid, Glassdoor finds
Daily News, March 9, 2016
Physicians, lawyers and research and development managers bring home the biggest paychecks, according to Glassdoor’s latest report highlighting the 25 Highest Paying Jobs in America for 2016. The report is entirely based on people with these jobs who have shared their salaries on Glassdoor over the past year.
Jobs offering the highest salaries include:
- Median base salary: $180,000
- Number of job openings: 2,064
- Median base salary: $144,500
- Number of job openings: 995
- Research and development manager
- Median base salary: $142,120
- Number of job openings: 112
- Software development manager
- Median base salary: $132,000
- Number of job openings: 3,495
- Pharmacy manager
- Median base salary: $130,000
- Number of job openings: 1,766
- Strategy manager
- Median base salary: $130,000
- Number of job openings: 701
- Software architect
- Median base salary: $128,250
- Number of job openings: 655
- Integrated circuit designer engineer
- Median base salary: $127,500
- Number of job openings: 165
- IT manager
- Median base salary: $120,000
- Number of job openings: 3,152
- Solutions architect
- Median base salary: $120,000
- Number of job openings: 2,838
“This report reinforces that high pay continues to be tied to in-demand skills, higher education and working in jobs that are protected from competition or automation. This is why we see several jobs within the technology and healthcare industries,” said Glassdoor Chief Economist Andrew Chamberlain. “There’s no doubt that pay is among the leading factors most job seekers weigh when determining where to work. However, our research shows that a big paycheck isn’t necessarily tied to long-term satisfaction in your job. Instead, when we dig deeper into what keeps employees satisfied once they’re in a job and with a company, we find that culture and values, career opportunities, and trust in senior leadership are the biggest drivers of employee satisfaction.”
The new ADP/Moody’s National Employment Report: 81% of all new job growth in March, 2016 came from Small and Mid-size Companies!
March 30, 2016
Private sector employment increased by 200,000 jobs from February to March (a decrease from February’s 214,000 additions), according to the March ADP National Employment Report®, which is produced by ADP® 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: 86,000
1-19 employees 51,000
20-49 employees 35,000
Medium businesses: 75,000
50-499 employees 75,000
Large businesses: 39,000
500-999 employees 20,000
1,000+ employees 18,000
Goods producing 9,000
Service providing 191,000
Financial activities 14,000
Professional/business services 28,000
Payrolls for businesses with 49 or fewer employees increased by 86,000 jobs in March, up from February’s downwardly revised 68,000. Employment at companies with 50-499 employees increased by 75,000 jobs, up from February’s 60,000. Employment at large companies – those with 500 or more employees – dropped off to 39,000 which is about half of February’s 77,000. Companies with 500-999 added 20,000 jobs, up from 14,000 in February. Companies with over 1,000 employees fell from 63,000 jobs added in February to 18,000 this month.
Goods-producing employment rose by 9,000 jobs in March, up from a downwardly revised 2,000 in February. The construction industry added 17,000 jobs, which was down from February’s 24,000. Meanwhile, manufacturing added 3,000 jobs after losing 9,000 the previous month.
Service-providing employment rose by 191,000 jobs in March, down from 204,000 in February. The report indicates that professional/business services contributed 28,000 jobs, down sharply from February’s 51,000. Trade/transportation/utilities grew by 42,000, well above the 24,000 jobs added the previous month. Financial activities added 14,000 jobs which is in line with the average monthly increase in that sector over the past year.
“The Trade, Transportation and Utilities sector had its best month of employment gains since last June,” said Ahu Yildirmaz, VP and head of the ADP Research Institute. “Steady employment growth and accelerating wage growth in the workforce appear to be benefitting the Trade segment in particular.”
Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues on its amazing streak. The March job gain of 200,000 is consistent with average monthly job growth of the past more than four years. The only industry reducing payrolls is energy as has been the case for over a year. All indications are that the job machine will remain in high gear.”
(The April 2016 ADP National Employment Report will be released at 8:15 a.m. ET on May 4, 2016).
Due to the important contribution that small businesses make to economic growth, employment data that is 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 2016 Small Business Report Highlights
Total Small Business Employment: 86,000
|●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 2016
On March 17th, the U.S. Bureau of Labor Statistics (BLS) reported that the number of job openings increased to 5,500,000 on the last business day of January. Hires declined to 5,000,000 while separations edged down to 4,900,000. Within separations, the quits rate was 2.0%, and the layoffs and discharges rate was 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 2015 annual estimates for hires and separations. The annual number of hires and quits increased in 2015, while the annual number of layoffs and discharges edged up, and the annual number of other separations was essentially unchanged.
Job openings remain at historically high levels, rising to 5,500,000 (+260,000) in January. The job openings rate was 3.7%. The number of job openings increased in January for total private (+289,000) and was little changed for government. Job openings increased in wholesale trade (+74,000) and construction (+61,000), but decreased in educational services (-40,000) and state and local government education (-16,000). In the regions, job openings increased in the Midwest over the month.
The number of hires decreased to 5,000,000 (-372,000) in January. The hires rate was 3.5%. The number of hires decreased for total private (-333,000) and government (38,000) in January. The decline in hires was widespread across industries. There was a decline in hires in health care and social assistance (-49,000), educational services (42,000), transportation, warehousing, and utilities (-34,000), and state and local government (-32,000). Hires also edged down in professional and business services
(-101,000), accommodation and food services (-67,000), state and local government, excluding education (-16,000), and federal government (-6,000). In the regions, hires decreased in the South.
Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, and disability, as well as transfers to other locations of the same firm.
There were 4,900,000 total separations in January, edging down (-225,000) from December. The total separations rate in January was 3.4%. The number of total separations edged down for total private (-199,000) and government (-26,000). Total separations rose in information (+19,000) but fell in accommodation and food services (122,000) and in state and local government, excluding education (-19,000). In the regions, the number of total separations fell in the South.
The number of quits fell to 2,800,000 (-284,000) in January. The quits rate was 2.0%. The number of quits fell for total private (-286,000) and was little changed for government over the month. Quits fell in construction (-56,000), transportation, warehousing, and utilities (-34,000), professional and business services (-80,000), and health care and social assistance (-49,000). Quits decreased in 3 out of the 4 regions over the month: Northeast, South, and West.
There were 1,700,000 layoffs and discharges in January, little changed from December. The layoffs and discharges rate was 1.2%. The number of layoffs and discharges was little changed over the month for total private and edged down for government (-21,000). Seasonally adjusted estimates of layoffs and discharges are now available for individual industries, although for industries where no seasonal pattern was detected, the seasonally adjusted estimates are identical to the not seasonally adjusted estimates. In January, layoffs and discharges rose in transportation, warehousing, and utilities (+31,000) and federal government (+8,000) but fell in accommodation and food services (-72,000) and state and local government education (-16,000). The number of layoffs and discharges was little changed over the month in the regions.
In January, other separations rose to 437,000 (+69,000). Over the month, the number of other separations rose for total private to 378,000 (+75,000) and was little changed for government at 58,000. Seasonally adjusted estimates of other separations are now available for individual industries and regions, although for industries and regions where no seasonal pattern was detected, the seasonally adjusted estimates are identical to the not seasonally adjusted estimates. In January, the number of other separations increased in health care and social assistance (+22,000), transportation, warehousing, and utilities (+19,000), real estate and rental and leasing (+9,000), and information (+8,000), and edged up in finance and insurance (+12,000). The number of other separations decreased in federal government (-4,000). In the regions, the number of other separations rose in the South and West.
Net Change in Employment
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 2016, hires totaled 61,700,000 and separations totaled 59,000,000, yielding a net employment gain of 2,700,000. These totals include workers who may have been hired and separated more than once during the year.
Annual Levels and Rates
Calculating annual levels and rates allows additional comparisons across years. In 2015, annual levels for hires and quits rose for the 6th consecutive year. Hires reached 61,700,000 (43.5% of employment) and quits reached 33,400,000 (23.6% of employment). The layoffs and discharges annual level edged up in 2015 for the 2nd year, reaching 20,900,000 (14.8% of employment). The annual level for other separations was essentially flat in 2015 at 4,600,000 (3.2% of employment) after rising the past 3 years. The annual level for total separations (the sum of quits, layoffs and discharges, and other separations) rose for the 5th consecutive year, reaching 58,900,000 (41.5% of employment) in 2015.
(The Job Openings and Labor Turnover Survey results for February 2016 are scheduled to be released on Tuesday, April 5, 2016.)
As we recruiters know, that 5,500,000 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 5,500,000 published job openings now become a total of 27,500,000 published and hidden job orders.
In March there were 7,966,000 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 7,966,000 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 Decreased 31,500 in March
March 30, 2016
- The 1st quarter of 2016 showed a decrease of 137,000
- The Northeast and Midwest showed losses with South and West regions showing small gains
- Note: March data incorporates the HWOL annual revision
Online advertised vacancies decreased 31,500 to 5,130,500 in March, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series. The February Supply/Demand rate stands at 1.51 unemployed for each advertised vacancy with a total of 2,700,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was around 7,800,000 in February.
“The last 3 quarters of revised data for 2015 were essentially flat, with the 1st quarter of 2016 showing a loss of 137,000,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “For about the past year, employer demand has been in a hold pattern, but the most recent quarter’s data indicates some additional weakness in demand.”
In March, the Professional category saw widespread small losses with the largest loss in Healthcare Practitioners (−39.2). The Services/Production category generally saw small gains with the exception of losses in Transportation (−19.0) and Healthcare Support (−3.8).
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 2016 Conference Board Help Wanted OnLine® (HWOL) Data Series will be released at 10:00 AM ET on Wednesday, May 4, 2016).
In March, 2016 the regular unemployment number rose to 5.0%, and the broader U-6 measure rose to 9.8%, a little less than twice as high as the regular unemployment figure.
The above 9.8% 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 13 years:
March 2015 10.9%
March 2014 12.6%
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 8.2%
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 1st, 2016, the BLS published the most recent unemployment rate for March, 2016 of 5.0% (actually it is 5.001%, up by .083% from 4.918% in February, 2016.
The unemployment rate was determined by dividing the unemployed of 7,966,000 (—up from the month before by 151,000—since March, 2015 this number has decreased by 591,000) by the total civilian labor force of 159,286,000 (up by 396,000 from February, 2016). Since March 2015, our total civilian labor force has increased by 2,396,000 workers.
(The continuing ‘Strange BLS Math’ saga): The BLS continues to increase the total Civilian Noninstitutional Population—this time up to 252,768,000. This is an increase of 191,000 from last month’s increase. In one year’s time, this population has increased by 2,688,000. The Civilian Noninstitutional Population has increased each month by…)
|Up from February 2016||by||191,000|
|Up from January 2016||by||180,000|
|Up from December 2015||by||461,000|
|Up from November 2015||by||189,000|
|Up from October 2015||by||206,000|
|Up from September 2015||by||216,000|
|Up from August 2015||by||229,000|
|Up from July 2015||by||220,000|
|Up from June 2015||by||213,000|
|Up from May 2015||by||208,000|
|Up from April 2015||by||189,000|
|Up from March 2015||by||186,000|
|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 increased the Civilian Labor Force to 159,286,000 (up from February by 396,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 93,482,000 ‘Not in Labor Force’—down by 206,000 from last month’s 93,688,000. Since March, 2015, 292,000 US workers have vanished! Where did those 292,000 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 most of 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 survive 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—rose to 63.0%. This is .6% above the historically low rate of 62.4% recorded in September and October—and, before that, the rate recorded in October 1977—9 months into Jimmy Carter’s presidency—38 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 was the same as last month’s 2.4%). Or, you can look at it another way. We usually place people who have college degrees. That unemployment rate in March was 2.6% (this rate was .1% higher than last month’s 2.5%).
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 25th, the Bureau of Economic Analysis (BEA) announced the real gross domestic product (GDP) — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of +1.4% in the fourth quarter of 2015, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0%.
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 1.0%. With this third estimate for the fourth quarter, the general picture of economic growth remains largely the same; personal consumption expenditures (PCE) increased more than previously estimated. The increase in real GDP in the fourth quarter reflected positive contributions from PCE,residential fixed investment, and federal government spending that were partly offset by negative contributions from nonresidential fixed investment, exports, private inventory investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased. The deceleration in real GDP in the fourth quarter primarily reflected downturns innonresidential fixed investment and in state and local government spending, a deceleration in PCE, and a downturn in exports that were partly offset by a smaller decrease in private inventory investment, a downturn in imports, and an acceleration in federal government spending.
*The economy needs to expand at about +3% to keep the unemployment rate from rising.
2015 GDP Real GDP increased 2.4% in 2015 (that is, from the 2014 annual level to the 2015 annual level), the same rate as in 2014. The increase in real GDP in 2015 primarily reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, residential fixed investment, private inventory investment, state and local government spending, and exports. Imports, which are a subtraction in the calculation of GDP, increased. Comparing real GDP growth in 2015 with growth in 2014, real GDP increased 2.4% in both years, though there were offsetting movements in the components. Decelerations in nonresidential fixed investment and in exports and an acceleration in imports were offset by accelerations in PCE and in residential fixed investment, a smaller decrease in federal government spending, and accelerations in private inventory investment and in state and local government spending.
(The “advance” estimate for the 1st Quarter 2016 GDP will be released on April 28th, 2016).
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. Currently, in 2015, workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although eight states provide fewer weeks and two provide more. No additional weeks of federal benefits are available in any state: the temporary Emergency Unemployment Compensation (EUC) program expired at the end of 2013, and no state currently qualifies to offer more weeks under the permanent Extended Benefits (EB) program. 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 2015 2.4%
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 2015 2.5%
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%
March’s 2016 rates for these two categories, 2.4% and 2.6%, respectively, are trending very positively and are approaching the halcyon numbers we attained in the 2005-2008, time frames. 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 than 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