Bob Marshall’s April 2015 BLS Analysis for Recruiters; 5/8/15
April BLS Preface
Bob Marshall – Training/Coaching Updates:
Productive Resources, Spring Meeting, Knoxville, IA, Thursday, May 21, 2015
I will present an all-day meeting program on Thursday, May 21, 2015 for Productive Resources in Knoxville, IA. The sessions will include Recruiting the ‘Placeable’ Candidate, Establishing Elegant Rapport through Elegant Communication, ‘Robocruiter’ and the Total Account Executive and Your Desk as a Manufacturing Plant. Q&A will follow each session.
The Newport Group (TNG), June 10-11, 2015
I will conduct my third training visit to The Newport Group 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$600 per month (Three Month Commitment) President247 Bryans Drive, Suite firstname.lastname@example.org 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 @ email@example.com. Small businesses plan to hire fewer staff The Newport Group acquires digital talent search firm AESC cites positive outlook for global job market in 2015
- Additional findings include:
- “This year represents the highest point we’ve seen since the global financial crisis,” said Glenda Brown, managing director, AESC and BlueSteps. “After major cutbacks, hiring is now in full swing at the management level. AESC member executive search firms have seen the number of searches reach an all-time high, showing that companies know that enhancing their senior talent teams is vital for success. We expect 2015 to be a landmark year for both the search industry and the global job market.”
- The report found 72.4% of management-level professionals worldwide feel more optimistic about their career opportunities for 2015, an increase of 21.4% compared to the previous year, and 88.2% of management-level professionals responded that they are open to new opportunities in 2015.
- Management-level professionals share a more positive outlook on the global job market for 2015, according to The 2015 BlueSteps Job Outlook Report released today by the Association of Executive Search and Leadership Consultants.
- Daily News, April 23, 2015
- The Newport Group currently counts 43 full-time employees. Average placements are in the salary range of $250,000, with the higher ends around $700,000. Three Sixty had less than 10 employees when acquired, with average placement salaries at $200,000 and higher ends at $500,000.
- “Three Sixty Digital Talent is known as a leading executive search provider in the digital space, and their ‘people first’ approach is in line with our mission and business operations,” said Newport founder and President John Fitzpatrick. “With this transaction, we’re adding valuable capabilities to The Newport Group as we continue our expansion, and offering unrivaled executive search services to organizations in the digital world.”
- Three Sixty’s brand will remain as is, and all Three Sixty executives have been retained as managing directors.
- The transaction closed today; terms were not disclosed.
- Encinitas, Calif.-based The Newport Group targets technical and senior management positions within the oil and gas, life sciences, real estate development, construction, environmental engineering and asset management industries. The acquisition now expands its footprint into marketing and big data markets throughout North America.
- Executive search and consulting firm The Newport Group acquired Three Sixty Digital Talent, an executive search services provider targeting the programmatic, AdTech and data analytics industries.
- (this is a news item from one of my coaching clients…congratulations, John!)
- Daily News, April 21 2015
- Braun Research conducted the Bank of America Small Business Owner Report survey by phone from March 4 through March 27, 2015, on behalf of Bank of America. Braun contacted a nationally representative sample of 1,000 small business owners in the United States with annual revenue between $100,000 and $5.0 million and employing between two and 99 employees.
- When asked about the top challenges small business owners have with employees, 38% cited finding talent. It was followed by salary or wage demands, 28%; healthcare costs, 28%; maintaining morale and productivity, 19%; and employee turnover, 16%.
- Among those who say it’s difficult to find candidates, a lack of necessary skills and unrealistic salary expectations ranked as the top challenges at 59% and 45% respectively. And 29% said the top challenge was potential employees would rather work for a large or midsize brand.
- However, 41%, of small business owners said it is difficult to find qualified candidates, with Generation X small business owners expressing the greatest frustration at 47%, compared with 39% of baby boomers and 36% of millennials.
- Fewer small business owners plan to hire new staff in the next 12 months compared to one year ago, according to the recently released spring 2015 Bank of America Small Business Owner Report. The report found 46% plan to hire, down from 52% who planned to hire in the same survey one year ago.
- Daily News, May 4, 2015
- 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.
- 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!
- 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!
- 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.
- 520-842-5550 (fax)
- McDonough, GA 30252-2513
- TBMG, International
- Bob Marshall
- 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.
- The management-level job outlook is most positive in the US (84.3% positive), followed by Asia Pacific and Europe (67.5% and 68.2% positive respectively).
- Management-level professionals rank technology, healthcare/life sciences and financial services as the 3 sectors that will experience growth in 2015.
- 44.1% of management-level professionals expect the average timeline for finding a new job opportunity in 2015 to be 6 to 12 months.
“There should be a higher number of executive openings in 2015 and as a result, there will be more options for executives in the marketplace,” said Sally Stetson of AESC member firm Salveson Stetson Group. “With that said, it doesn’t mean that it is easier to find that ‘right’ position. There is a high level of competition for these roles.”
The AESC’s BlueSteps survey of 659 management professionals, director-level through C-suite, was conducted from January to February and included responses from management-level professionals in the industrial, technology, healthcare, professional services and other sectors worldwide; 50% of responses came from the Americas, 35% from EMEA and 15% from Asia Pacific.
US employers up demand for H-1B workers by 35%
Daily News, April 14, 2015
The number of petitions for H-1B visas rose 35% this year, exceeding the annual cap on available visas within the first week petitions were accepted, according to numbers released Monday by US Citizenship and Immigration Services.
Nearly 233,000 petitions were filed for H-1B visas in the first week they were available, according to the USCIS. That is up from 172,500 last year and 124,000 the year before.
Employers use H-1B visas to bring in highly skilled foreign temporary workers such as IT specialists. Although demand is up, the US caps number of available H-1B visas at 65,000 per year plus another 20,000 for workers with advanced degrees. Because the cap was reached within the first week this year, the USCIS stopped accepting petitions and used a lottery to determine who would receive an H-1B.
USCIS has used the lottery in past years as well when the cap was exceeded within a week.
Survey says 63% believe ACA will negatively impact business
Daily News, April 9, 2015
The Patient Protection and Affordable Care Act’s impact on businesses is getting worse, according to a survey by Express Employment Professionals. The survey of business owners, decision makers and human resource professionals found 63% believe the ACA will negatively affect their business in the future, up from 53% in 2014’s survey. Similarly, 62% believe the ACA will lead to less job creation, up slightly from 2014.
When asked whether the ACA will cause them to remain under 50 full-time employees, the threshold for the requirement to provide health insurance or face penalties, 25% said it would. The percentage was higher for businesses with workers currently numbering in the 40s; among businesses with 45 to 49 employees, 53% said they would try to remain under 50 workers, while 67% of businesses with 40 to 44 employees said the same.
“Almost two-thirds of business leaders are telling us that the Affordable Care Act is hurting them, and they’re saying things are getting worse, not better,” said Express CEO Bob Funk. “That fact should make anyone sit up and take notice. What they’re telling us is that the law isn’t just affecting their bottom line. It’s limiting their desire to hire new workers.”
The survey included 692 business owners, decision makers and HR professionals and was conducted in March 2015.
One-fifth of employers unknowingly asked an illegal interview question
Daily News, April 9, 2015
When it comes to drawing the line between what is and isn’t appropriate to ask a job candidate, the parameters aren’t always clear, according to a new CareerBuilder survey released today. The survey found 20% of hiring managers indicated they have asked a question in a job interview only to find out later it was illegal to ask.
“It’s important for both interviewer and interviewee to understand what employers do and don’t have a legal right to ask in a job interview – for both parties’ protection,” said Rosemary Haefner, chief human resources officer at CareerBuilder. “Though their intentions may be harmless, hiring managers could unknowingly be putting themselves at risk for legal action, as a job candidate could argue that certain questions were used to discriminate against him or her.”
The following questions are illegal for hiring managers to ask; yet, when asked if they knew if these questions were illegal, at least one-third of employers indicated they didn’t know:
- What is your religious affiliation?
- Are you pregnant?
- What is your political affiliation?
- What is your race, color or ethnicity?
- How old are you?
- Are you disabled?
- Are you married?
- Do you have children or plan to?
- Are you in debt?
- Do you social drink or smoke?
The survey was conducted by Harris Poll on behalf of CareerBuilder among 2,192 hiring managers and human resources professionals. The survey was conducted from Nov. 4 to Dec. 2, 2014.
The new ADP/Moody’s National Employment Report: 97% of all new job growth in April, 2015 came from Small and Mid-size Companies—A New Record High!!
May 6, 2015
Private sector employment increased by 169,000 jobs from March to April (down from the increase of 189,000 jobs last month), according to the April 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: 94,000
1-19 employees 54,000
20-49 employees 40,000
Medium businesses: 70,000
50-499 employees 70,000
Large businesses: 5,000
500-999 employees 0
1,000+ employees 5,000
Goods producing <-1,000>
Service providing 170,000
Financial activities 7,000
Professional/business services 34,000
Payrolls for businesses with 49 or fewer employees increased by 94,000 jobs in April, down from 105,000 in March. Employment among companies with 50-499 employees increased by 70,000 jobs, up from 64,000 the previous month. Employment gains at large companies – those with 500 or more employees – decreased slightly from March, adding 5,000 jobs in April, down from 6,000. Companies with 500-999 employees added no jobs, after adding just 2,000 in March. Companies with over 1,000 employees added 5,000 jobs, a small improvement from 4,000 the previous month.
Goods-producing employment declined by 1,000 jobs in April, down from 3,000 jobs gained in March. The construction industry added 23,000 jobs, up from 21,000 last month. Meanwhile, manufacturing lost 10,000 jobs in April, after losing 3,000 in March.
Service-providing employment rose by 170,000 jobs in April, down slightly from 172,000 in March. The report indicates that professional/business services contributed 34,000 jobs in April, up from March’s 28,000. Expansion in trade/transportation/utilities grew by 44,000, up from March’s 41,000. The 7,000 new jobs added in financial activities is a drop from last month’s 12,000.
“April job gains came in under 200,000 for the second straight month,” said Carlos Rodriguez, president and chief executive officer of ADP. “Companies with 500 or more employees had the slowest growth.”
Mark Zandi, chief economist of Moody’s Analytics, said, “Fallout from the collapse of oil prices and the surging value of the dollar are weighing on job creation. Employment in the energy sector and manufacturing is declining. However, this should prove temporary and job growth will reaccelerate this summer.”
(The May 2015 ADP National Employment Report will be released at 8:15 a.m. ET on June 3, 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.
April 2015 Small Business Report Highlights
Total Small Business Employment: 94,000
|●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 – February 2015
On April 7th, the BLS reported that there were 5,100,000 job openings on the last business day of February, little changed from 5,000,000 in January. Hires were little changed at 4,900,000 in February and separations were little changed at 4,700,000. Within separations, the quits rate was 1.9% and the layoffs and discharges rate was unchanged at 1.1%; both rates were little different from the previous month. 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.
There were 5,100,000 job openings on the last business day of February, little changed from January. This was the highest level of job openings since January 2001. The job openings rate for February was 3.5%. The number of job openings was little changed for total private and government and no industries posted significant changes from January. Job openings increased in the Midwest region.
The number of job openings (not seasonally adjusted) increased over the 12 months ending in February 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 4,900,000 hires in February, about the same as in January. The hires rate in February was 3.5%. The number of hires was little changed for total private and government in February. There was little to no change in the number of hires in all industries over the month. In the regions, the number of hires increased in the Northeast and decreased in the South.
Over the 12 months ending in February, the number of hires (not seasonally adjusted) was little changed for total nonfarm, total private, and government. The number of hires was little changed in all industries and increased in the Northeast region.
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 February 2015, hires totaled 59,300,000 and separations totaled 56,100,000, yielding a net employment gain of 3,200,000. 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 March 2015 are scheduled to be released on Tuesday, May 12th, 2015).
As we recruiters know, that 5,100,000 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 5,100,000 published job openings now become a total of 25,500,000 published and hidden job orders.
In April there were 8,549,000 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 8,549,000 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 Dropped 104,500 in April
May 6, 2015
- Following a very strong first quarter, demand slowed in April
- After 8 years, US Supply/Demand rate reaches a significant recovery milestone
Online advertised vacancies decreased 104,500 to 5,361,900 in April, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series, released today. The March Supply/Demand rate stands at 1.57 unemployed for each advertised vacancy, with a total of 3,100,000 more unemployed workers than the number of advertised vacancies. The number of unemployed was 8,600,000 in March.
“After 8 years, the US Supply/Demand (S/D) rate is now back to its pre-recession best in March 2007,” said Gad Levanon, Managing Director, Macroeconomic and Labor Market Research. “The Great Recession had taken the US S/D rate to a high of about 5.0 in April 2009 (nearly 5 unemployed competing for each ad). This month’s S/D rate shows a little over 1.5 unemployed competing for each ad.”
The significant drop in the US S/D rate has been helped by very strong employer demand, ranging from 4 to 5 million ads each month over the past 4 years, making it easier for the recession’s 15 million unemployed to find employment opportunities. With the recession’s unemployment numbers finally down significantly, the continued high employer demand at 5 million ads per month will make the job search for new entrants into the labor market much easier.
Occupational Changes for the Month of April
In April, 8 of the largest online job categories posted decreases while 2 posted increases. Computer and Math demand decreased 29,400 in April to 579,200 due to drops in demand for web developers and applications software developers. Management ads dropped 22,300 to 478,300 largely due to declines in demand for sales managers and medical and health services managers. Business and Financial ads dropped 17,000 to 333,300 due to drops in demand for accountants. Architecture and Engineering ads dropped 14,200 to 166,800, largely due to a decline in demand for industrial engineers. Transportation ads dropped 13,200 in April to 374,100, largely due to a decline in demand for truck drivers.
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 May 2015 Conference Board Help Wanted OnLine® (HWOL) Data Series will be released at 10:00 AM ET on Wednesday, June 3, 2015).
In April, 2015 the regular unemployment number was slightly lower at 5.4%, and the broader U-6 measure edged down to 10.8%, twice as high as the regular unemployment figure.
The above 10.8% 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 April U-6 numbers for the past 12 years:
April 2014 12.3%
April 2013 13.9%
April 2012 14.5%
April 2011 15.9%
April 2010 17.0%
April 2009 15.8%
April 2008 9.2%
April 2007 8.2%
April 2006 8.1%
April 2005 9.0%
April 2004 9.6%
April 2003 10.1%
The April 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 May 8th, 2015, the BLS published the most recent unemployment rate for April, 2015 of 5.4% (actually it is 5.443% down by .022% from 5.465% in March, 2015).
The unemployment rate was determined by dividing the unemployed of 8,549,000 (—down from the month before by 26,000—since April, 2014 this number has decreased by 1,147,000) by the total civilian labor force of 157,072,000 (up by 166,000 from March, 2015). Since April 2014, our total civilian labor force has increased by 1,652,000 workers.
(The continuing ‘Strange BLS Math’ saga): The BLS continues to increase the total Civilian Noninstitutional Population—this time up to 250,266,000. This is an increase of 186,000 from last month’s increase. In one year’s time, this population has increased by 2,827,000. The Civilian Noninstitutional Population has increased each month by…)
|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 157,072,000 (up from March by 166,000).
Subtract the second number (‘civilian labor force’) from the first number (‘civilian noninstitutional population’) and you get 93,194,000 ‘Not in Labor Force’—up by 20,000 from last month’s 93,174,000. Since April, 2014, 1,175,000 US workers have vanished! Where did those 1,175,000 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—rose slightly to 62.8%. This is .1% above the historically low rate of 62.7% recorded last month and 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 April 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 April was 2.7% (this rate rose by .2% from 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 April 29th, 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 0.2% in the first quarter of 2015, according to the “advance” estimate released by the BEA. In the fourth quarter, real GDP increased 2.2%.
The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the first quarter, based on more complete data, will be released on May 29, 2015.
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE) and private inventory investment that were partly offset by negative contributions from exports, nonresidential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP growth in the first quarter reflected a deceleration in PCE, downturns in exports, in nonresidential fixed investment, and in state and local government spending, and a deceleration in residential fixed investment that were partly offset by a deceleration in imports and upturns in private inventory investment and in federal government spending.
*The economy needs to expand at about 3% to keep the unemployment rate from rising.
(The “second” estimate for the 1st Quarter 2015 GDP will be released on May 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 April “management, professional and related” types of worker category, you will find the following rates:
April 2014 2.9%
April 2013 3.5%
April 2012 3.7%
April 2011 4.0%
April 2010 4.5%
April 2009 4.0%
April 2008 2.0%
April 2007 1.8%
April 2006 1.9%
April 2005 2.2%
April 2004 2.6%
April 2003 2.9%
April 2002 2.7%
Here are the rates, during those same time periods, for “college-degreed” workers:
April 2014 3.3%
April 2013 3.9%
April 2012 4.0%
April 2011 4.5%
April 2010 4.8%
April 2009 4.4%
April 2008 2.1%
April 2007 1.8%
April 2006 2.2%
April 2005 2.4%
April 2004 2.9%
April 2003 3.1%
April 2002 3.0%
So, while April’s 2015 rates for these two categories, 2.4% and 2.7%, 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