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U.S. Employment Situation (February 2015)
published by Bruce Steinberg | March 6, 2015

 

 

www.brucesteinberg.net

Home of the first and only U.S. employment report podcasts

 

 

We keep coming back to the Beveridge Curve ... and is a recession lurking out there?

 

In April 2012 we first examined a Beveridge Curve, which looks at excess demand in a market place, and tried to relate it to the employment economy. Some intriguing trends emerged from that initial examination, so we looked at it again in November 2013 and concluded at the time that the Curve, "suggests that the unemployment rate still has some room to decline going into the new year [2014]." Since that was more than a year ago, we thought it time to see what the Curve could be telling us now.

 

Obviously, we still see how severe the recession had been with the unemployment rate rising as the number of job vacancies declined. Currently, the post-recession trend of a declining unemployment rate and a rising job vacancy rate continues and this is a good thing. The data do not suggest that this trend will change in the near-term future. [Incidentally, there is no harm should the two trendlines cross -- it's just a statistical convenience that they use the same scale.]

 

Likewise for the relationship between the unemployment rate and changes in private-sector jobs. The rate of growth for private-sector jobs has remained fairly stable after relatively quickly rising immediately after the recession. Of course, many would like to be the growth rate be greater now, but it is firmly in positive territory and complaints about the recovery not generating as many jobs as it should are nothing new.

 

But, when looking at the charts -- specifically, the space between the end of the 2001 recession and the beginning of the most recent one, the hairs on the back of our neck stood at attention. Many people focus on the length of the recession and not the expansion, which is the period between the end of a recession an the start of the next one.

 

So, where are we now in the expansion relative to past cycles? From 1945 to 2009 when the most recent recession ended, there have been 11 economic cycles and the expansion has lasted an average of 58.4 months. Limiting the period a bit from 1970 to 2009, there have been seven cycles with an average expansion of 71.0 months. Since, June 2009, when the last recession ended and, by definition, the expansion started, it has now been 68 months.

 

However, there is a school of thought that the two recessions in the early 1980s, sometimes referred to as a "double-dipper," were not really two recessions, but a single entity. Eliminate the 12-month expansion of 1982, and the average expansion since 1970 rises to 79.0 months.

 

Does this mean that we are overdue for a recession? Not necessarily as there are no hard and fast rules. The 'so-called' weakness of the current recovery may actually help extend it given the fairly large degree of resource reallocation as a result of the recession. Since 1945, there have been seven expansions shorter and four longer in duration than the current one. If the counter starts with the 1970 expansion, there have been only three shorter and four longer.

 

Food for thought (locally grown, gluten free, non-GMO, free-range, and without hormones, of course).

 

 

Strategic Planning Tools ...

Our Temporary Help Services Interactive Data Book tool will enable to view the local (down to the county level) temporary help services trends as well as benchmark your local staffing operation  to discover exactly where you are positioned in the market and if your offices are performing up to the local market.

Then use our Employment Tracking Tool that is designed to assist you in identifying and evaluating new sectors and markets. It examines the overall employment trends by industry in the given market to help determine possibly under-serviced industries to target marketing efforts (as well as what industries to avoid). By doing this, it shows what industries are growing and therefore are in expansion mode making them eager for a wide variety of products and services and likely in need of additional staff.

See further descriptions of these two strategic planning tools and links to the demos


What will 2022 look like for staffing services?
 

The U.S. Bureau of Labor Statistics recently published 10-year employment projections. These projections are based upon a plethora of criteria including how changes in population demographics will affect the demand for specific goods and services, the types of jobs, and levels of education for workers to fill those jobs.  Our report highlights some of the changes in the direction that both jobs (occupations) and well as employment changes by industry and sector that may be of special interest to staffing industry executives planning for the near-term future.

 

You may be surprised to learn that it appears that light industrial will be a growing sector for staffing services encompassing growing portion of staffing services jobs by the year 2022; office and administrative support jobs, although they will remain a significant part of staffing services jobs, will decline slightly as its portion of the overall mix.

 

Our report on the expected employment projections to the year 2022, which is only eight years away, as they relate to staffing services to assist you in planning for the future. Given the highly analytical nature of our readers and followers, this brief, eight-page report is light on words but heavy on tables and charts. And because we know you are a busy executive, you don't even have to go to the additional step of requesting this gratis and valuable report from us. Just directly download it from here.


 

Looking for more? Check out our podcasts!

Podcasts of the current employment situation will be available by 4:00 p.m. ET, Thursday, July 3rd. The video podcast, which you can start and stop to study the tables and graphs as well as replay individual sections, includes additional data and information.  Watch the video version here or just listen to the audio version here (no special hardware or software required), which also can be downloaded to an iPod or any smartphone.


The "ultimate consultant's consultant."

"Bruce is an invaluable resource to me in working through the strategic planning process with my clients in the staffing industry. Bruce consults with me on each engagement and customizes his deliverables accordingly, exceeding my expectations each time. He expediently gathers and compiles the data I need and delivers it in user-friendly reports which make the analysis portion of my job easy. Because with Bruce's assistance I can make strategy recommendations with confidence and accuracy, my clients benefit greatly in turn. He is the ultimate "consultant's consultant." -- Amy Bingham, Bingham Consulting Professionals View more Testimonials

 

February 2015 Employment Report

Quick recap

 

The unemployment rate dropped 0.2 percentage points to 5.5 percent for February. It has not been down to the level since May-June 2008. The drop in February was due to some relatively large movements in the unemployment rate's underlying components. More details in the "Household Survey" section at the bottom of this box.

 

From the other side of the monthly employment situation, job growth was strong at 295,000 more nonfarm jobs, which was better than the growth of 239,000 in January and clearly a big improvement from a year earlier when this metric only increased by 188,000 in February 2014.

 

Jobs Report

 

Total private-sector jobs grew by 288,000 in February 2015, which stronger than January's 237,000 increase as well as February 2014's gain of 175,000.

 

The private Goods-producing sector grew by only 29,000 jobs in February compared to growth of 64,000 in January, and also far off from one year ago (February 2014) when it grew by 47,000.

  • Building new jobs by the Construction sector clearly was cold with a gain of only 29,000 in February after adding 49,000 in January; a year ago, in February 2014, it added 26,000.

  • Manufacturers also appeared to be have cooled off with a gain of only 8,000 jobs in February after adding 21,000 in January. Durable goods managed to add 11,000 jobs in February after adding 16,000 in January; Nondurable goods manufacturers eliminated 3,000 jobs in February after growing by 5,000 in January.

  • It should come as no surprise that the declines in Mining and logging continued with a drop of 8,000 in February after descending 6,000 in January; a year ago, in February 2014, this sector added 1,000 jobs.

The private Service-providing sector added 259,000 more jobs in February, which was markedly better than January's growth of 173,000 and double of one year ago, February 2014, when it added only 128,000.

  • Hiring in the Retail trade sector continued to be strong with a mark-up (that's an increase) of 32,000 jobs in February on top of a relatively strong January that experienced a gain of 27,800 jobs. One year ago, in February 2014, this sector marked-down (that's a decline) 19,100 jobs.

  • The pace in the Wholesale trade sector slowed a bit with a gain of 11,700 jobs in February after increasing by 14,000 in January; one year ago, in February 2014, this sector added only 8,5,00 jobs.

  • Hiring activity certainly picked up in the Transportation and warehousing sector with an increase of 18,500 jobs in February after adding only 1,000 in January; a year ago, in February 2014, they shipped out (that's a decline) 3,700 jobs.

  • Financial activities employers added 10,000 jobs in February that was  disappointing compared to the 22,000 it added in January; one year ago, in February 2014, they added 13,000 jobs to their payrolls.

  • The Professional and business services sector picked up the pace with 51,000 more jobs in February compared to a gain of only 10,000 in January; one year ago, in February 2014, it added 69,000. Computer systems design and related services added 5,200 jobs in February that was a little weaker than the 7,400 it added in January.  Management and technical consulting services grew by 7,100 jobs in February that was much stronger than the 3,700 it added in January; Architectural and engineering services added 4,900 jobs in February that was just about even with the 4,800 it added in January.

  • The Education and health services sector added a total of 54,000 jobs in February with the sector's highly seasonal Educational services sub-sector conferring new jobs (that's adding) on 21,300. Home health care services was up by 3,200 in February, which was better than the 1,900 gain of January.

  • The party hats were not put away yet in the Leisure and hospitality sector as it increased 66,000 in February after adding 39,000 jobs in January, and clearly better than the 32,000 it added in February 2014.

The total number of Government jobs was up by 7,000. The federal government did nothing (there's a political joke in this datum point somewhere, but we are simply reporting this development in terms of new jobs); State government increased by 3,000 jobs; and Local government added 4,000 jobs.

Temporary Help Services Roundup

 

The February performance for temporary help performance can be summed up in two words and they would be "not good."

 

In February, temporary help services lost ground for the second month with a sequential decline of 7,800 jobs to 2,861,700, which was a decrease of 0.3 percent from January but maintained year-on-year growth of 5.2 percent from February 2014.  

 

From 2010 to 2014, inclusive, February's temporary help jobs number has been better than January's, so the decline in February 2015 is a bit of a concern.

 

The only marginally better news is that February 2015 was an improvement from January's performance. In January, THS was down 13,800 jobs (revised) with a sequential decrease of 0.5 percent and year-on-year growth of 6.2 percent.

 

The good news was that, although temporary help service's market share -- that is its portion of all jobs -- dropped to 2.01 percent in February from January's 2.02 percent, it is still higher than one year ago, in February 2014, it was 1.96 percent.

 

For a chart of temporary help's growth from January 1991 to February 2015 and comparing its trend to total employment, click here.

 

(if the chart is unclear, click on it  to open in a browser window)

 

Click on chart to open in a new browser window.

Household Survey

 

February's 5.5 percent unemployment rate was 0.2 percent lower than January's figure, but as mentioned earlier, this was due to some relatively large movements in the unemployment rate's underlying components.

 

In fact, there were only 96,000 more employed persons in February while there were 274,000 fewer unemployed persons and the number of people no longer in the workforce increased by 354,000. In other words, because a whole lot fewer people were unemployed -- and a whole lot more not considered as in the labor force -- the unemployment rate declined by 0.2 percentage points despite there being only a fairly small number of newly employed persons.

 

The employment-to-population ratio was 59.3 percent in February and up from 58.8 percent a year earlier. The labor force participation rate incrementally declined to 62.8 percent in February from January's 62.9 percent and also lower from a year ago, in February 2014, when it was 63.0. The number of discouraged workers continued to decline with only 732,000 of them compared to 755,000 a year earlier in February 2014.

 

BTW, we maintain an updated table of many major employment as well as other economic indicators here or here for the mobile version.


NEXT EMPLOYMENT REPORT -- FRIDAY, APRIL 3, 2015

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