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U.S. Employment Situation
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Another important labor market indicator -- Insured Unemployment
Last month in this space, we discussed the Federal Reserve Board's views about labor market slack and we presented several labor market indicators that the Fed looks at every month. (FYI, we also track several economic and labor market indicators, which can be found here.)
This month we'll address another measurement -- unemployment insurance claims, which is a widely-followed employment and economic indicator. Just as there are limitations to the unemployment rate reported by the Department of Labor's Bureau of Labor Statistics every month, the UI information reported by the Department of Labor's Employment and Training Administration also has its limitations. But, each fills in a piece of the labor market picture to help present a more complete evaluation of the state of the labor market.
There are several reasons why UI information is important when evaluating the state of the labor economy. Because the unemployment rate as reported by the Bureau of Labor Statistics has its limitations, another set of data about unemployment trends brought to the table can be very useful. Also, the UI information can assist in forecasting when wages may be rising. Almost by definition, declining UI claims mean that the labor market is tightening so, in order to attract and / or retain workers, employers need to raise wages.
Returning to the subject at hand -- and as we see in the chart to the right -- the widely reported initials claims for unemployment insurance (IC) have recently fallen to below 300,000 and are at pre-recessionary levels.
In addition, the lesser-reported rate of insured unemployment (IUR) has also fallen from recessionary levels and is also at a point consistent with an economy in an expansion period.
You've undoubtedly have heard that wages have been fairly stagnant throughout the recovery and that situation may be changing soon. As we see in the accompanying chart, UI claims have essentially returned to pre-recessionary levels and wage inflation could be just around the corner, which is just one more reason that many economists have opined that interest rates will be rising as the economy may be healthy enough to support such action.
And just to tickle your brain, one member of our editorial review committee pointed out maybe with a hint of irony, that "UI claims are highest when staffing companies are doing worst in a recession, so now things must be good." That got us to thinking, so we came up with another chart comparing the IUR and the job market share of temporary help services. No great surprise that there is an inverse relation. (Technical note: the exact shape of the IUR trend line are not the same in both charts because the IUR data are for the corresponding week of the month in the chart comparing it to THS market share; all the data in the top Insured Unemployment chart are weekly.)
OurTemporary 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 ourEmployment 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.
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.
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September 2014 Employment Report
Do we call it a "drop"? The unemployment rate did more than just incrementally declined, it actually declined by 0.2 percent to 5.9 percent in September the first time it was below six percent since July 2008, which was more than six years ago; it was 6.1 percent last month (August 2014) and was 7.2 percent a year ago (September 2013). For more detail, see the "Household Survey" section at the bottom of this column.
Incidentally, most economists had predicted that the September unemployment rate was going to be unchanged -- obviously, they have no idea so why does the media keep asking them?
On the other side of the monthly employment picture, the total number of jobs was up 248,000 that was a nice improvement from August's gain of only 180,000 and on par with July's growth of 243,000. A year ago, in September 2013, total nonfarm jobs grew by only 164,000.
Total private-sector jobs grew by 236,000 in September that, again, was a nice improvement from August's rather anemic growth of 175,000 and also on par with July's growth of 239,000. A year earlier, in September 2013, the private-sector grew payrolls by 153,000.
The private Goods-producing sector grew by 29,000 jobs in September compared to growth of only 14,000 in August, but still much below July's gain of 63,000.
The private Service-providing sector increased its pace of new hiring with 207,000 more jobs in September, which was better than the 161,000 it added in August and the 176,000 it grew by in July as well as the 131,000 jobs it increased by a year earlier in September 2103.
The total number of Government jobs was up by 12,000. The federal government was down 2,000 jobs; State government was up by 22,000; and Local government declined by 8,000.
Temporary Help Services Roundup
Temporary Help Services continued to grow and reach new highs with consistent and strong growth.
In September, Temporary help services was up 19,700 to 2,933,500, which was 0.7 percent sequential growth and year-on-year growth of 8.6 percent.
In August, THS was up by 24,600 jobs, which was a fairly large upward revision from the previously reported growth of 13,000. As we have observed in the past, revisions tend to be magnified at the end of the year as BLS approaches its annual benchmarking process that takes place early in the next year.
Temporary help service's market share -- that is its portion of all jobs -- continued to increase and reached an all-time high of 2.104 percent in September, the first time it breached 2.1 percent; in August it was 2.093 percent; it was 1.974 percent in September 2013. To see a chart of Temporary help's growth from January 1991 to September 2014 and comparing the trend to total employment, click here.
(if the chart is unclear, click onit to open in a browser window)
TheSeptember 5.9 percent unemployment rate -- the lowest it has been since July 2008 -- was a 0.2 percent decline from August's 6.1 percent. In September 2013, was 7.2 percent.
That 5.9 percent unemployment rate was the result of a labor force that contracted by 97,000 as the number of employed persons grew by 232,000 and the number of unemployed persons declined by 329,000. The number not in the labor force increased by 315,000.
The employment-to-population ratio was unchanged at 59.0 percent in September and up from 58.6 percent a year earlier. The labor force participation rate incrementally declined to 62.7 percent (was 62.8 percent in August) and it was lower than the 63.2 percent a year earlier. The number of discouraged workers continued to decline with only 698,000 of them compared to 852,000 a year earlier in September 2013.
BTW, we maintain an updated table of many major employment as well as other economic indicators here or here for the mobile version. And, in case you missed it in our opening commentary, we are starting to change the format of our economic indicators, starting with this month's jobs and employment data.
NEXT EMPLOYMENT REPORT --FRIDAY, NOVEMBER 7, 2014
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