December 2013 Archives

Tuesday December 31, 2013

More "quality" jobs seen as sign of improving economy

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Nia Hamm CNBC 

22 hours ago

Recent job gains and record highs in the stock market are signs that the U.S. economy is strengthening, leading many economists to believe job growth will continue into 2014.

"If we could maintain a 3 percent-plus pace next year ... I'm thinking so far we have in the second half of this year ... then yes, jobs prospects for everyone should improve," said Joseph A. LaVorgna, managing director and chief U.S. economist at Deutsche Bank Securities.

The job outlook should come as welcome news to millions of unemployed Americans as well as underemployed part-time workers who possess the skills to have higher-quality jobs and want to work full-time.

Yet there's a catch: Adding jobs isn't as big an economic driver as adding "quality" jobs.

With November's jobs report, the economy has added 2.1 million jobs this year. But nearly half have been in relatively low-wage sectors like retail, leisure and hospitality. These part-time, low-wage positions become important when analyzing the "underemployment rate"--a broader measure of joblessness that includes people who work part-time and people whose skills are not being fully utilized.

The good news is that many economists believe not only that job growth will increase in 2014 but that there will also be an uptick in better-quality, higher-paying jobs.

"What we do expect is that the recovery will shift gears ... and as it does, we will see more of the better-quality jobs," said Sophia Koropeckyj, managing director for Moody's Analytics.

"If we do see stronger manufacturing conditions, if we do see a stronger housing market, exports, that suggests ... we see the types of jobs shifting from these low-paid part-time jobs that characterized the economy for the past couple of years into the better-quality, full-time jobs," Koropeckyj said.

Federal Reserve Chairman Ben Bernanke said after the recent Fed decision to ease off its stimulus program, that "meaningful" progress in the jobs market led to the Fed's decision to modestly reduce its bong-buying by $10 billion a month starting in January. "I think we have been aggressive to try and keep the economy growing, and we are seeing progress in the labor market," Bernanke said.

That progress came in the form of an unemployment rate that sank to a five-year low of 7 percent in November, with nonfarm payrolls up by 203,000 jobs. That was about the same as October's unexpectedly strong gain of 200,000 jobs.

But the U.S. economy still faces many significant problems. Besides the many part-time workers who cannot find full-time work, many other Americans have stopped searching and dropped out of the labor force.

"There are millions of desperate workers out there, so even those really low-quality jobs just get snatched up," said Heidi Shierholz, economist at the Economic Policy Institute.

The underemployment rate, which economists call the U-6, fell to 13.2 percent from 13.8 percent in November. Economists believe much of that decline was likely due to the return of furloughed federal workers.

A Gallup poll indicated that 17.3 percent of the workforce is underemployed--a much higher number than the government's count. November's underemployment rate is up from 16.5 percent in October but remains statistically unchanged from 17.2 percent in November 2012, according to Gallup.

Then there is the plight of the long-term jobless. Millions of Americans have been out of work for unusually long periods of time. Many others have been forced to settle for low-wage positions, including millions of college graduates who aren't utilizing their degrees.

These factors lead to decreased spending power among average-wage workers who have trouble just making ends meet, and that's a trend that can block broad-based economic growth.

"We need demand for work to be done. What we have out there is an aggregate demand problem," Shierholz said. "People just aren't buying things--not because they're saving money ... but they just don't have money to spend, because the labor market is so weak."

It's a vicious cycle, and many economists don't believe job growth driven by low-paid sectors of the economy will lead to an increase in consumer confidence and spending, which leads to more jobs and lower unemployment.

Koropeckyj said the number of people who could only find part-time work doubled between early 2008 and 2010 and has been gradually increasing. Even the number of people employed part-time involuntarily who've had their hours cut has declined only gradually, to about 5 million people. "That's interesting because it's indicative of still an economy where there is not sufficient aggregate demand to get back to conditions that prevailed prior to the recession," she said.

What will continue to increase, Shierholz said, is corporate profits: "One of the reasons corporate profits are doing so well is because wages are so low."

Companies are sitting on mounds of cash heading into 2014. Companies around the globe have roughly $6.8 trillion of cash and equivalents on their balance sheets currently, according to Thomson Reuters. That's more than double the amount of a decade ago, and more than a trillion of that cash horde is in the U.S.

Howard Silverblatt, senior index analyst for S&P Dow Jones Indices, said unlocking this capital will be crucial for job growth. "Companies are not spending the money at this time. They are holding back.... They're not expanding," he said.

Silverblatt said corporations will need to see an increase in sales to become more liberal with cash on the balance sheet for expansion. It's another catch: Corporations aren't going to start spending and investing more capital unless they see an increase in demand, but the demand won't necessarily increase unless more higher-quality, better-paying jobs are created.

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Friday December 6, 2013

BLS: Staffing Job Growth Continues in November

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Staffing Up 8.6% From a Year Ago

Seasonally adjusted employment data released today by the U.S. Bureau of Labor Statistics indicate that temporary help employment added 16,400 new jobs in November (up 0.6% from October). BLS also revised September and October estimates up by 16,000 and 21,800, respectively, boosting growth from relatively flat to being on par with recent trends.

In a year-to-year comparison, staffing firms employed 8.6% more temporary workers in November than in the same month a year ago, according to BLS.

Nonseasonally adjusted BLS data, which estimate the actual number of jobs in the economy, indicated that the staffing industry added 13,100 jobs in November (up 0.5% from October). On a year-to-year basis, there were 7.9% more staffing employees in November than in the same month last year.

"Staffing and recruiting firms report that businesses across several sectors are beginning to feel more confident about the economy and prospects for the months ahead," says Richard Wahlquist, president and chief executive officer of the American Staffing Association. "Because payroll budgets are being reset for January, December is an excellent time for job seekers to pursue new employment opportunities."

Total U.S. nonfarm payroll employment increased by 203,000 jobs in November and the unemployment rate declined from 7.3% to 7.0%. Monthly job gains have averaged 193,000 over the past three months, BLS says. Employment increased in transportation and warehousing (31,000), health care (19,000), and manufacturing (27,000).

BLS also released preliminary October employment data for search and placement services: seasonally adjusted, employment increased 5.9% to 292,900.

For more information, visit the ASA newsroom.

Interviews with ASA executives are available.

The American Staffing Association is the voice of the U.S. staffing industry. ASA and its affiliated chapters advance the interests of staffing and recruiting firms of all sizes and across all sectors through legal and legislative advocacy, public relations, education, and the promotion of high standards of legal, ethical, and professional practices. ASA members provide the full range of employment and work force services and solutions, including temporary and contract staffing, recruiting and permanent placement, outplacement and outsourcing, training, and human resource consulting.