BLS Analysis for July 2013

Bob Marshall’s July 2013 BLS Analysis; 8/2/13

July BLS Preface

strong>TBMG News

Bob Marshall – Training/Coaching Updates

For those of you who have asked for the next couple of month updates, I will be presenting at NAPS this September in Las Vegas*; I will be conducting a webinar for Top Echelon in August; and I am still committed to offering a pre-recorded webinar for Mark Whitby in July (maybe August)…date and time TBD.

My NAPS presentations

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

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

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

My Top Echelon presentation

Tuesday, August 13th, 2013, 1:00pm-2:00pm (ET), “How to Avoid Dead-End Searches…and Identify Hot Ones!”

My RecruiterTraining OnLine.com presentation

August, 2013, RecruiterTraining OnLine.com, Mark Whitby, Scotland, “Establishing Elegant Rapport through Elegant Communication”, pre-recorded webinar, date and time in August, TBD.

COACHING**

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

Here are the details of my three coaching plans:

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

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

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

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

 

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

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

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

Preface

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

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

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

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

 

 

Economy expands at brisk pace in 2nd quarter, defying gloom

Nick Ut, AP, NBC News, July 31, 2013

The U.S. economy isn’t as feeble as economists thought it was.

Gross domestic product expanded at a 1.7% annualized rate in the 2nd quarter, the government reported. That’s up from the 1.1% in the 1st quarter (revised downward from 1.8%) and much higher than forecasts of a 1.0% rise.

A rebound in business spending, export growth and a sharp moderation in the pace of decline in government outlays boosted economic growth in the April-June period, offsetting a slowdown in consumer spending and a steady rate of inventory accumulation.

Still, the report marked a third straight quarter of GDP growth below 2%, a pace that normally would be too soft to bring down unemployment. But growth was poised to gain even more momentum in the second half of the year as the fiscal burden brought on by belt-tightening in Washington eases.

Adding to the better tenor of the report, comprehensive revisions to the data cast the economy in a better light than previously.

The government has implemented some changes in how it calculates GDP. For example, research and development spending will now be treated as investment, and defined benefit pension plans will be measured on an accrual basis, rather than as cash.

Economic growth was relatively stronger between 2009 and 2012 than previously reported. The economy grew 2.8% last year, 0.6% faster than the government had previously estimated.

The revisions also yielded a higher rate of savings, a good omen for consumer spending in the future.

Higher taxes, as Washington tries to shrink the government’s budget deficit, constrained consumer spending in the second quarter, keeping the economy on an anemic growth pace.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, slowed to a 1.8% growth pace after rising at a 2.3% rate in the first quarter.

With domestic demand tepid, businesses kept their inventories from bulging. Inventory accumulation added 0.41%, less than half the contribution from the prior quarter.

Other details of the report showed exports rebounded, showing the largest percentage gain since the third quarter of 2011, even as demand weakened in Europe and China. But the increase was not enough to offset a rise in imports, leaving a trade deficit that weighed on growth.

There was good news from the housing sector, with double-digit growth for spending on residential construction. Housing, which triggered the 2007-09 recession, is growing strongly, helping to keep the economic recovery anchored.

Business spending on equipment and software reversed the prior quarter’s decline, lifted by a turnaround in investment in nonresidential structures and gains in outlays on equipment and intellectual products.

While government spending contracted for a third straight quarter, the pace of the decline slowed sharply as state and local government spending rebounded. Defense spending fell marginally after declining sharply in the past two quarters.

Reuters contributed to this report.

Private sector wage growth to remain flat

Daily News, July 16 2013

Private sector workers can expect to see no increase in the overall pace of annual wage increases in the coming months, according to the revised second quarter wage trend indicator released today by Bloomberg BNA, a publisher of specialized news and information.

The index now stands at 98.72 (second quarter 1976 = 100), virtually unchanged from the first-quarter reading of 98.73. Over the past two years, the forward-looking indicator has fluctuated within a narrow range, from 98.47 to 98.75.

“The labor market is showing signs of slow improvement but has not strengthened enough to cause a pickup in wage growth,” said economist Kathryn Kobe, a consultant to BNA. Private sector wages in the coming months are expected to increase at or near the first-quarter rate of 1.7% year-over-year, which was reported by the Department of Labor.

Study: Video interviewing bad for employers, candidates

Daily News, July 29 2013

Job applicants interviewed through video conferencing come across as less likeable, according to a study from the DeGroote School of Business at McMaster University in Hamilton, Ontario, Canada.

According to the study, conducted by Greg Sears and Haiyan Zhang when they were PhD students at DeGroote, using video conferencing for job interviews disadvantages both employers and candidates.

In simulated job interviews, candidates who were interviewed by video-conferencing were rated lower by interviewers and were less likely to be recommended for hiring. Meanwhile, candidates also rated their interviewers as less attractive, personable, trustworthy and competent.

“Increasingly, video technology is being used in employment interviewing because companies feel it provides convenience and cost savings,” explains Sears, now an associate professor at the Sprott School of Business. “Despite their growing use, our study shows that video conference interviews are not equivalent to face-to-face interviews.”

The researchers recommend that video conferencing be used only for preliminary screening interviews. Final selection of candidates should be conducted through face-to-face interviews.

The study is published in the journal Management Decision. The research was funded by the Social Sciences & Humanities Research Council.

 

 

Obamacare Killing Jobs

by Dick Morris, July 19, 2013

“Obamacare’s impact…

“We are already seeing Obamacare’s impact in the economy and it is not a pretty picture.

“In 2012 there were 5 full-time jobs created for each part-time job.  Thus far in 2013, it’s the exact opposite.  There are 5 part-time jobs for each full-time job.  In 2012, per month, there were 171,000 full time and 30,000 part-time jobs.  But in 2013 it’s completely flipped…90,000 part-time jobs and only 22,000 full-time jobs.

“The Obamacare mandate that if you have more than 50 employees you have to get health insurance for everyone that’s working more than 30 hours per week paying $5,600 for an individual, $16,000 for a family or a fine of $2,000 per worker if you don’t provide the insurance.  What that is doing is leaving firms to lay-off workers to get to the 50 threshold.   And if they can’t do that, scaling back as much of their workforce as possible to less than 30 hours per week so they will have two people working 15 hours a week as opposed to one person working 30 hours per week.  Major cut in income…major re-arrangement of our entire economy brought about solely by this President’s insistence on this kind of fundamental change right in the middle of an economic downturn.

“It’s having a horrific effect on the economy.  And what isn’t even measured in those statistics is the impact on businesses hiring.  The Chamber of Commerce just completed its survey and found that a quarter of all small businesses say that they are going to meet the costs of Obamacare by laying off workers.   Another quarter say they’ll meet it by cutting back the number of hours.  And another quarter say they will meet it by postponing new hires.  Only a quarter of the small businesses in the United States say that they are planning any hiring over the next two years and only a quarter said that they have hired anybody in the last two years.

“Stagnation as far as the eye can see.  And yet Bernanke keeps printing money at the rate of $85 Billion dollars per month.  That money is not flowing into the economy.  It is going directly into the banks and being kept in the investment banking houses that are using it to play the stock market and bet on derivatives.  That’s bidding up stock prices, attracting a lot of suckers into the market and the market crash is going to come very soon and they will be all left high and dry and the knowledgeable players will have gotten their money out.  All of this fueled by this program of just printing money by Bernanke.

“The truth is that the Federal Reserve Board is not here anymore to control inflation; or to protect the dollar; or even to stimulate economic growth.  It’s here so that it can enrich a small group of people who are part of a collusive effort to play the market and play the derivatives off of the money being printed by the Federal Reserve Board and they are not operating in the best interests of the United States.

“So that’s the real story.  That’s what’s really happening.  David Stockman (former Director of the Office of Management and Budget) is one of the only people out there that’s really saying it.  So I just want to warn you.  Beware.”

US – ADP: Employment up across all regions

Daily News, July 10 2013

 

Private-sector employment increased on a seasonally adjusted basis in June in all 9 U.S. Census Bureau divisions, according to ADP’s monthly regional employment report.  Additionally, all the 29 U.S. states tracked by the report recorded gains, as did the District of Columbia.

California, Texas, Florida, New York, Pennsylvania and Illinois posted the largest job gains during the month; the 6 states combined to account for more than half of all new private sector jobs in June.  However, Nevada recorded the highest percentage increase at 0.30%.

“All 9 U.S. Census Bureau Divisions recorded private sector job growth in June, with the South Atlantic, Pacific and West South Central generating the most new jobs for the second consecutive month,” said Ahu Yildirmaz, senior director of the ADP Research Institute.

Jobs added, by state:

  • Alabama: 3,380, +0.20%
  • Arizona: 5,210, +0.25%
  • California: 31,040, +0.26 %
  • Colorado: 4,400, +0.23%
  • Connecticut: 1,540, +0.11%
  • Florida: 12,910, +0.20%
  • Georgia: 4,880, +0.20%
  • Idaho: 1,300, +0.25%
  • Illinois: 8,500, +0.17%
  • Indiana: 6,560, +0.26%
  • Kentucky: 3,220, +0.21%
  • Maryland: 2,160, +0.10%
  • Massachusetts: 3,550, +0.12%
  • Michigan: 4,370, +0.13%
  • Minnesota 2,540, +0.11%
  • Nevada: 3,070, +0.30%
  • New Jersey: 2,890, +0.09%
  • New York: 10,000, +0.13%
  • North Carolina: 2,750, +0.08%
  • Ohio: 4,760, +0.11%
  • Oregon: 2,430, +0.18%
  • Pennsylvania: 9,370, +0.18%
  • South Carolina: 3,420, +0.22%
  • Tennessee: 3,690, +0.16%
  • Texas: 23,420, +0.25%
  • Utah: 2,450, +0.23%
  • Virginia: 5,730, +0.19%
  • Washington: 6,190, +0.26%
  • Washington D.C.: 720, +0.14%
  • Wisconsin: 980, +0.04%

ADP and Moody’s Analytics Inc. derived the report from an anonymous subset of about 406,000 U.S. business clients, which employ more than 23,000,000 U.S. workers.

 

The new ADP/Moody’s National Employment Report;

71% of all new job growth in July comes from Small and Mid-size Companies

Released, July 31, 2013

Private sector employment increased by 200,000 jobs from June to July, according to the July ADP National Employment Report®, which is produced by ADP®, a leading provider of human capital management solutions, in collaboration with Moody’s Analytics.  The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.  June’s job gains were revised upward to 188,000 from 198,000.

By Company Size

Small businesses: 82,000

1-19 employees 51,000

20-49 employees 31,000

Medium businesses: 60,000

50-499 employees 60,000

Large businesses: 57,000

500-999 employees 7,000

1,000+ employees 50,000

By Sector

Goods producing 22,000

Service providing 177,000

Industry Snapshot

Construction 22,000

Manufacturing

Trade/transportation/utilities 45,000

Financial activities 4,000

Professional/business services 49,000

Goods-producing industries added 22,000 jobs in July.  Construction payrolls rose by 22,000 in July, while manufacturing payrolls declined by 5,000.

Service-providing industries added 177,000 jobs in July, the largest gain since last November.  Gains were broad-based across industries, with professional/business services adding 49,000 jobs over the month.  Trade/transportation/utilities services contributed 45,000 jobs, while financial activities showed a modest gain of 4,000 jobs, down from the 10,000 jobs added in June.

“The U.S. private sector added a total of 200,000 jobs during the month of July, with businesses of all sizes contributing to the overall gain and small businesses generating the greatest share, just as they did in the previous month,” said Carlos A. Rodriguez, president and chief executive officer of ADP. “Among industries tracked by the ADP National Employment Report, professional/business services showed the largest increase in July with the addition of 49,000 jobs, while construction added 22,000 jobs, a stronger gain than in June.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth remains remarkably stable. Businesses are adding to payrolls in most industries and across all company sizes. The job market has admirably weathered the fiscal headwinds, tax increases and government spending cuts. This bodes well for the next year when those headwinds are set to fade.”

(The August 2013 ADP National Employment Report will be released at 8:15 a.m. ET on September 4, 2013).

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

July 2013 Small Business Report Highlights*

Total Small Business Employment:              82,000

●By Size

►1-19 employees

51,000

►20-49 employees

31,000

●By Sector for 1-49 Employees

►Goods Producing

16,000

►Service Producing

67,000

●By Sector for 1-19 Employees

►Goods Producing

11,000

►Service Producing

39,000

●By Sector for 20-49 Employees

►Goods Producing

4,000

►Service Producing

27,000

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

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

Job Openings and Structural Unemployment

 

On July 9th, the BLS reported that there were 3,800,000 job openings on the last business day of May, little changed from April.  (The Job Openings and Labor Turnover Survey results for June 2013 are scheduled to be released on Tuesday, August 6th, 2013).  The 3,800,000 reflects published openings comprised of jobs that are advertised either online or in print format.

The hires rate (3.3%) and separations rate (3.2%) also were little changed in May. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region.

As we recruiters know, that 3,800,000 number only represents 20% of the jobs currently available in the marketplace.  The other 80% of job openings are unpublished and are filled through networking or word of mouth or by using a RECRUITER.   So, those 3,800,000 published job openings now become a total of 19,000,000 published and hidden job orders.

In July there were 11,514,000 unemployed workers.  What was the main reason why those job openings were open?  Two Words:  Structural Unemployment.  If we can’t figure out how to educate and/or reeducate those 11,514,000 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 Down 92,200 in July

July 31, 2013

$1·         Labor demand is nearly flat in 2013 with dip of 87,000 between January and July

$1·         Unemployment flattens in Q2 2013 as labor demand stalls

$1·         July declines are widespread across States and occupations

$1·         Construction job demand continues to rise while demand for sales and office workers falls

Online advertised vacancies dropped 92,200 in July to 4,888,100, according toThe Conference Board Help Wanted OnLine® (HWOL) Data Series. In the first seven months of 2013, labor demand dipped an average of 12,500 per month. The Supply/Demand rate stands at 2.4 unemployed for each vacancy. In June there were 6,800,000 more unemployed than the number of advertised vacancies, down from 11,900,000 at the end of the recession in June 2009.

“In July labor demand continued to be flat,” said June Shelp, Vice President of The Conference Board. “While the 4,900,000 advertised vacancies in July shows a healthy churn in the labor market for job changers, it does little to reduce the ranks of the unemployed. In the first seven months of 2013 national labor demand has been essentially flat, and the trend is down in more than half of the 20 largest States.”

Jobs ads continued to show strength in the building occupations including: construction; grounds and buildings maintenance; installation and repair; and transportation/material moving. Lackluster occupations included management, sales workers, and office help.

 

The July 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 August 2nd, 2013, the BLS published the most recent unemployment rate for July, 2013 of 7.4% (actually it is 7.390% down .167% from 7.557% in June, 2013).

The unemployment rate was determined by dividing the unemployed of 11,514,000—down from the month before by 263,000—since July, 2012 (one year ago) this number has decreased by 1,231,000) by the total civilian labor force of 155,798,000 (down by 37,000 from June, 2013).  Since July 2012, our total civilian labor force has increased by 803,000 workers.

 

(The continuing ‘Strange BLS Math’ saga):  The BLS continues to increase the total Civilian Working Population—this time up to 245,756,000.  In one year’s time this population has increased by 2,402,000.  This is an increase of 15,000 over last month’s increase.  It has increased each month…

 

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 have increased the Civilian Labor Force to 155,798,000 (down from June by 37,000).

 

Subtract the second number (‘civilian labor force’) from the first number (‘civilian working population’) and you get 89,958,000 (not 89,957,000 as reported) ‘Not in Labor Force’.  That is a increase of 241,000 ‘Not in Labor Force’ in one month’s time!  Since July 2012, 1,598,000 US workers have vanished!  Where did those 1,598,000 potential workers disappear to in one year’s time?  I am assuming they still have to eat and pay their rent.  They still need money, don’t they?  The government tells us that these NILFs got discouraged and just gave up looking for a job.  My monthly recurring question is:  “If that is the case, how do they live when they don’t earn any money because they don’t have a job???”

 

Our Employment Participation Rate—the population 16 years and older working or seeking work—fell .1% to 63.4%.  One year ago, our Participation Rate in July was 63.7%.

 

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 July was 4.1% (this rate fell slightly from last month’s 4.2%).  Or, you can look at it another way.  We usually place people who have college degrees.  That unemployment rate in July was 3.8% (this rate fell slightly from last month’s 3.9%).

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 find no unemployment!  None!  Zilch!

THE IMPORTANCE OF GDP

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

 

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

On July 31st, the Bureau of Economic Analysis announced the second-quarter, advance estimate, of our real gross domestic product (GDP) — the output of goods and services produced by labor and property located in the United States.  GDP increased at an annual rate of 1.7% in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 1.1% (revised), down from 1.8% in the second estimate.

The Bureau emphasized that the second-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 second quarter, based on more complete data, will be released on August 29, 2013.

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

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

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

IT IS IMPOSSIBLE FOR UNEMPLOYMENT EVER TO BE ZERO

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

There are five main sources of unemployment:

  1. Cyclical (or demand-deficient) unemployment – This type of unemployment fluctuates with the business cycle.  It rises during a recession and falls during the subsequent recovery.  Workers who are most affected by this type of unemployment are laid off during a recession when production volumes fall and companies use lay-offs as the easiest way to reduce costs.  These workers are usually rehired, some months later, when the economy improves.
  1. Frictional unemployment – This comes from the normal turnover in the labor force.  This is where new workers are entering the workforce and older workers are retiring and leaving vacancies to be filled by the new workers or those re-entering the workforce.  This category includes workers who are between jobs.
  1. Structural unemployment – This happens when the skills possessed by the unemployed worker don’t match the requirements of the opening—whether those be in characteristics and skills or in location.  This can come from new technology or foreign competition (e.g., foreign outsourcing).  This type of unemployment usually lasts longer than frictional unemployment because retraining, and sometimes relocation, is involved.  Occasionally jobs in this category can just disappear overseas.
  1. Seasonal unemployment – This happens when the workforce is affected by the climate or time of year.  Construction workers and agricultural workers aren’t needed as much during the winter season because of the inclement weather.  On the other hand, retail workers experience an increase in hiring shortly before, and during, the holiday season, but can be laid off shortly thereafter.
  1. Surplus unemployment – This is caused by minimum wage laws and unions.  When wages are set at a higher level, unemployment can often result.  Why?  To keep within the same payroll budget, the company must let go of some workers to pay the remaining workers a higher salary.

Other factors influencing the unemployment rate:

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

 

 

WHERE RECRUITERS PLACE

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

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

July 2012                     4.8%

July 2011                     5.0%

July 2010                     5.0%

July 2009                     5.5%

July 2008                     2.9%

July 2007                     2.5%

July 2006                     2.5%

July 2005                     2.7%

July 2004                     3.1%

July 2003                     3.7%

July 2002                     3.5%

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

July 2012                     4.1%

July 2011                     4.3%

July 2010                     4.5%

July 2009                     4.7%

July 2008                     2.5%

July 2007                     2.1%

July 2006                     2.1%

July 2005                     2.4%

July 2004                     2.7%

July 2003                     3.1%

July 2002                     3.0%

So, while July’s 2013 rates for these two categories, 4.1% and 3.8%, respectively, are trending positively, when looking at the big picture, it’s not anything to be very happy about either—especially when we see how well we had it during the 2002-2008 time frame.  But regardless, these unemployment numbers usually include a good number of job hoppers, job shoppers and rejects.  We, on the other hand, are engaged by our client companies to find those candidates who are happy, well-appreciated, making good money and currently working and we entice them to move for even better opportunities—especially where new technologies are expanding.  This will never change.  And that is why, no matter the unemployment rate, we still need to market to find the best job orders and we still need to recruit to find the best candidates.

Below are the numbers for the over 25 year olds:

Less that H.S. diploma – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

7.7%

7.4%

8.2%

7.9%

8.4%

8.9%

8.6%

9.7%

9.8%

10.4%

10.6%

10.9%

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

12.0%

12.6%

13.3%

14.8%

15.5%

15.5%

15.4%

15.6%

15.0%

15.5%

15.0%

15.3%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

15.2%

15.6%

14.5%

14.7%

15.0%

14.1%

13.8%

14.0%

15.4%

15.3%

15.7%

15.3%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

14.2%

13.9%

13.7%

14.6%

14.7%

14.3%

15.0%

14.3%

14.0%

13.8%

13.2%

13.8%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

13.1%

12.9%

12.6%

12.5%

13.0%

12.6%

12.7%

12.0%

11.3%

12.2%

12.2%

11.7%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

12.0%

11.2%

11.1%

11.6%

11.1%

10.7%

11.0%

H.S. Grad; no college – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

4.6%

4.7%

5.1%

5.0%

5.2%

5.2%

5.3%

5.8%

6.3%

6.5%

6.9%

7.7%

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

8.1%

8.3%

9.0%

9.3%

10.0%

9.8%

9.4%

9.7%

10.8%

11.2%

10.4%

10.5%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

10.1%

10.5%

10.8%

10.6%

10.9%

10.8%

10.1%

10.3%

10.0%

10.1%

10.0%

9.8%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

9.4%

9.5%

9.5%

9.7%

9.5%

10.0%

9.3%

9.6%

9.7%

9.6%

8.8%

8.7%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

8.4%

8.3%

8.0%

7.9%

8.1%

8.4%

8.7%

8.8%

8.7%

8.4%

8.1%

8.0%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

8.1%

7.9%

7.6%

7.4%

7.4%

7.6%

7.6%

Some College; or AA/AS – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

3.7%

3.8%

3.9%

4.0%

4.3%

4.4%

4.6%

5.0%

5.1%

5.3%

5.5%

5.6%

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

6.2%

7.0%

7.2%

7.4%

7.7%

8.0%

7.9%

8.2%

8.5%

9.0%

9.0%

9.0%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

8.5%

8.0%

8.2%

8.3%

8.3%

8.2%

8.3%

8.7%

9.1%

8.5%

8.7%

8.1%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

8.0%

7.8%

7.4%

7.5%

8.0%

8.4%

8.3%

8.2%

8.4%

8.3%

7.6%

7.7%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

7.2%

7.3%

7.5%

7.6%

7.9%

7.5%

7.1%

6.6%

6.5%

6.9%

6.6%

6.9%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

7.0%

6.7%

6.4%

6.4%

6.5%

6.4%

6.0%

BS/BS + – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

2.1%

2.1%

2.1%

2.1%

2.3%

2.4%

2.5%

2.7%

2.6%

3.1%

3.2%

3.7%

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

3.8%

4.1%

4.3%

4.4%

4.8%

4.7%

4.7%

4.7%

4.9%

4.7%

4.9%

5.0%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

4.9%

5.0%

4.9%

4.9%

4.7%

4.4%

4.5%

4.6%

4.4%

4.7%

5.1%

4.8%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

4.2%

4.3%

4.4%

4.5%

4.5%

4.4%

4.3%

4.3%

4.2%

4.4%

4.4%

4.1%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

4.2%

4.2%

4.2%

4.0%

3.9%

4.1%

4.1%

4.1%

4.1%

3.8%

3.8%

3.9%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

3.7%

3.8%

3.8%

3.9%

3.8%

3.9%

3.8%

Management, Professional & Related – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

2.2%

2.2%

2.1%

2.0%

2.6%

2.7%

2.9%

3.3%

2.8%

3.0%

3.2%

3.3%

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

4.1%

3.9%

4.2%

4.0%

4.6%

5.0%

5.5%

5.4%

5.2%

4.7%

4.6%

4.6%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

5.0%

4.8%

4.7%

4.5%

4.5%

4.9%

5.0%

5.1%

4.4%

4.5%

4.7%

4.6%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

4.7%

4.4%

4.3%

4.0%

4.4%

4.7%

5.0%

4.9%

4.4%

4.4%

4.2%

4.2%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

4.3%

4.2%

4.2%

3.7%

4.0%

4.4%

4.8%

4.5%

3.9%

3.8%

3.6%

3.9%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

3.9%

3.8%

3.6%

3.5%

3.5%

4.2%

4.1%

Or employed…(,000)

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

52,165

52,498

52,681

52,819

52,544

52,735

52,655

52,626

53,104

53,485

53,274

52,548

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

52,358

52,196

52,345

52,597

52,256

51,776

51,810

51,724

52,186

52,981

52,263

52,131

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

52,159

52,324

52,163

52,355

51,839

51,414

50,974

50,879

51,757

51,818

52,263

51,704

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

51,866

52,557

53,243

53,216

52,778

52,120

51,662

51,997

52,665

52,864

52,787

52,808

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

53,152

53,208

53,771

54,055

54,156

53,846

53,165

53,696

54,655

55,223

54,951

54,635

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

54,214

54,563

54,721

54,767

54,740

54,323

54,064

And unemployed…(,000)

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

1,164

1,159

1,121

1,088

1,407

1,478

1,585

1,779

1,539

1,647

1,786

1,802

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

2,238

2,137

2,292

2,164

2,373

2,720

3,034

2,925

2,859

2,593

2,530

2,509

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

2,762

2,637

2,600

2,464

2,450

2,644

2,687

2,762

2,381

2,417

2,525

2,468

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

2,557

2,435

2,381

2,196

2,419

2,598

2,742

2,671

2,450

2,410

2,336

2,303

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

2,410

2,336

2,330

2,062

2,275

2,472

2,666

2,556

2,245

2,170

2,077

2,221

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

2,211

2,164

2,020

1,980

1,990

2,358

2,286

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

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

53,329

53,657

53,802

53,907

53,951

54,213

54,240

54,405

54,643

55,132

55,060

54,350

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

54,596

54,333

54,637

54,761

54,629

54,496

54,844

54,649

55,045

55,574

54,793

54,640

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

54,921

54,961

54,763

54,819

54,289

54,058

53,661

53,641

54,138

54,235

54,788

54,172

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

54,423

54,992

55,624

55,412

55,197

54,718

54,404

54,668

55,115

55,274

55,123

55,111

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

55,562

55,544

56,101

56,117

56,431

56,318

55,831

56,252

56,900

57,393

57,028

56,856

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

56,425

56,727

56,741

56,747

56,730

56,681

56,350

Management, Business and Financial Operations – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

2.3%

2.3%

2.2%

2.1%

2.7%

2.5%

2.6%

2.8%

2.8%

3.0%

3.6%

3.9%

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

4.6%

4.5%

4.5%

4.4%

4.6%

4.8%

4.9%

5.0%

5.2%

5.4%

5.4%

5.2%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

5.2%

5.1%

5.4%

5.1%

4.9%

4.8%

4.7%

4.9%

4.3%

5.0%

5.5%

5.7%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

5.3%

4.9%

4.8%

4.6%

4.9%

4.6%

4.6%

4.6%

4.6%

4.7%

4.6%

4.4%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

4.5%

4.4%

4.4%

4.0%

4.1%

3.8%

3.8%

3.7%

3.5%

3.6%

3.8%

4.1%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

4.0%

3.9%

3.5%

3.5%

3.8%

3.5%

3.1%

Professional & Related – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

2.1%

2.1%

2.0%

2.0%

2.5%

2.9%

3.2%

3.6%

2.8%

3.0%

3.0%

2.9%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

4.9%

4.6%

4.3%

4.1%

4.3%

5.0%

5.2%

5.3%

4.4%

4.1%

4.1%

3.8%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

4.3%

4.1%

3.9%

3.5%

4.0%

4.9%

5.3%

5.1%

4.4%

4.1%

4.0%

4.0%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

4.2%

4.1%

4.0%

3.5%

4.0%

4.8%

5.5%

5.2%

4.3%

3.9%

3.5%

3.8%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

3.8%

3.8%

3.6%

3.4%

3.3%

4.6%

4.7%

Sales & Related – Unemployment Rate

1/08

2/08

3/08

4/08

5/08

6/08

7/08

8/08

9/08

10/08

11/08

12/08

5.2%

5.2%

4.8%

4.3%

5.1%

5.6%

6.2%

6.3%

5.7%

6.1%

6.5%

7.0%

1/09

2/09

3/09

4/09

5/09

6/09

7/09

8/09

9/09

10/09

11/09

12/09

7.7%

8.4%

8.9%

8.6%

8.9%

9.1%

8.3%

8.7%

8.9%

9.5%

9.1%

8.9%

1/10

2/10

3/10

4/10

5/10

6/10

7/10

8/10

9/10

10/10

11/10

12/10

10.1%

10.2%

9.7%

9.2%

9.6%

9.4%

10.1%

9.0%

9.4%

9.1%

8.8%

8.3%

1/11

2/11

3/11

4/11

5/11

6/11

7/11

8/11

9/11

10/11

11/11

12/11

9.3%

9.0%

8.5%

8.5%

9.4%

9.7%

9.4%

8.6%

9.4%

8.2%

7.8%

7.7%

1/12

2/12

3/12

4/12

5/12

6/12

7/12

8/12

9/12

10/12

11/12

12/12

8.2%

7.9%

8.1%

7.6%

7.9%

8.4%

8.3%

8.6%

7.9%

7.0%

7.3%

7.0%

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/13

11/13

12/13

8.5%

8.2%

7.7%

6.9%

7.1%

6.7%

6.9%