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U.S. Employment Situation
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Is the aging population REALLY driving the decline in the E/P ratio …
Last month, we discussed the employment-to-population ratio and how some think it is a misleading indicator of the employment situation.
To review,unlike the unemployment rate that has some shortcomings mainly because it does not take into account people who have stopped looking for a job, the E/P is a ratio of those who have jobs to the entire working age population. Both the original blog posters (economists from the Federal Reserve Bank of New York) and unabashed liberal columnist Paul Krugman of The New York Times agreed that the aging population was driving the decline in the E/P ratio. Here's our discussion from last month, which includes links to the original blog postings.
This month we decide to see if their agreed upon conclusion was correct. Our conclusion -- maybe not.
The top / smaller chart is the same one that we ran last month -- the E/P ratio of everyone 16 years of age and older.
This month, we broke out the E/P by age. As you can see, the E/P trend for those 55 and older (and the 65 and older subset) is different for the younger age groupings. Unlike the trend for the other age groups, the E/P for both the 55 and older as well as the 65 and older subset is higher today than at the onset of the recession.
Conversely, the E/P ratio for all the other age categories is lower today (because of production schedules, the data presented here run from January 2004 to February 2014) than at the onset of the recession (January 2008). And although it is getting close to returning to the levels of ten years ago, the E/P ratio is still lower now than it was in January 2004 for all those 16 to 54. It appears this age group is driving the decline in the E/P ratio.
The E/P ratio is higher for those 55 and older (and the 65 and older subset) today then ten years ago perhaps as those who were 55 ten years ago and now are 65 have had to return to work as their retirement financial plans were negatively affected by the recession. [Federal labor experts expect the labor force participation rate for the 55 and older cohort to rise until at least 2022 (and declining participation rates for all those 16 to 54 years old) because of increasing life expectancies, healthcare costs rising more than inflation and retirement fund returns, as well as other reasons.]
A very learned economist once told me not to base all conclusions 'upon squiggly lines in a chart.' Maybe it's time for some of those learned economists to study this subject further -- here's a line of thought to investigate: How has the increase in the E/P ratio for those 55 and older impacted the decline in the E/P ratio for the younger age groups? In other words, are the older people taking the jobs from the younger people? How's that for a contrarian point-of-view?
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.
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.
Demonstrations of both strategic planning tools are available.
Looking for more? Check out our podcasts!
Podcasts of the current employment situation will be available by 4:00 p.m. ET Friday, December 6th. 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.
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March 2014 Employment Report
The unemployment rate was unchanged at 6.7 percent in March; it was 7.5 percent one year ago. Although there were nearly 500,000 more employed persons, the labor force expanded by essentially the same number and with little movement in the number of unemployed persons, the unemployment rate was static. More detail about the employment status in the Household Survey section at the bottom of this column.
Total nonfarm job growth was 192,000 but -- although within the trend of the past few months -- many analysts and labor market observers were expecting much more as they thought the severe weather of January and February had suppressed hiring earlier in the year. Revised data for January is showing a 144,000 job increase and February was up 197,000.
We suspect you'll be hearing a lot of interesting interpretations of the jobs number ranging from 'March job growth was actually weak since it should have been much higher because of the bad weather at the beginning of the year' to 'the severe weather apparently did not change employers' hiring plans.' We wonder if any expert will fess up and say, 'Whoops, we got it wrong' or 'We really had no idea -- we were only guessing.'
Total private-sectors jobs grew by 192,000, which was slightly better than the 188,000 increase of February and good growth compared to the 166,000 rise in January.
The number of jobs in the private Goods-producing sector grew by 25,000 in March, but growth seems to be heading in the wrong direction. January experienced a 65,000 job increase and February grew by 40,000.
The private Service-providing sector continued to recover from relatively weak growth in January (up 101,000) with growth of 148,000 in February with an increase of 167,000 in March.
The pace at the Wholesale trade continued to slow with only a gain of only 7,100 in March after adding 18,300 jobs on January and growth of 14,500 in February.
Transportation and warehousing sector apparently started
to recover form its 5,400 decline of February with a gain of 7,900 in March. Financial activities
The Professional and business services sector's
growth was disappointing with growth of only 57,000 in March, which --
although better than January's gain of only 49,000 -- was less than February
increase of 81,000. Computer systems
design and related services added 6,100 jobs in March that was clearly
stronger than the 4,000 it added in February. Management and technical
consulting services, which is a smaller sector, grew by 3,500 in
March that was clear not as strong as the 5,800 it added in February. And Accounting and bookkeeping services
may have miscalculated after adding 17,000 in February because they deleted
100 (yes, one hundred) jobs in March. The Education and health services sector
The Education and health services sector
New hiring in Leisure and hospitality sector was remarkably consistent with 29,000 more jobs in February and the same amount in March and almost that amount (up 25,000) in January.
The total number of Government jobs were unchanged. The federal government shrank by 9,000; State government was down by 2,000; but Local government was up by 11,000.
Temporary Help Services Roundup
In March, Temporary help services again had some very strong growth with an increase of 28,500 to a record 2,837,500 (was up a similar amount -- 27,600 -- in February). This was growth of 1.0 percent from February and a 9.6 percent increase from March 2013. This was the highest year-on-year growth since the summer of 2012.
And Temporary help service's market share -- that is its portion of all jobs -- blew past all previous records to 2.06 percent in March, which was almost 0.02 percentage points above last month's reading. To see a chart of Temporary help's growth from 1991 to March 2014 and comparing the trend to total employment, click here.
(if the chart is unclear, click onit to open in a browser window)
The6.7 percent unemployment rate was unchanged in March; in February it crept up from January's 6.6 percent.
That 6.7 percent unemployment rate was the result of a labor force that expanded by 503,000, but the number of employed persons increase by almost the same number (up 476,000) as the number of unemployed grew by only 27,000. The number not in the labor force declined by 331,000.
The employment-to-population ratio was up to 58.9 percent in March (was 58.8 in February and 58.5 a year earlier) as the labor force participation rate also rose to 63.2 percent in March (was 63.0 in February but 63.3 in March 2013). The number of discouraged workers was down to 698,000 in March 2014 from 803,000 a year earlier.
NEXT EMPLOYMENT REPORT -- FRIDAY,MAY 2, 2014
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