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U.S. Employment Situation
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Some new labor market indicators ...
Looking at new job creation and the unemployment rate every month is certainly a good way to get a bead on what is happening in the labor market and the employment economy. But, if two labor market indicators are good, what about two dozen? Economists at the Federal Reserve Bank of Kansas City recently developed two new indicators that they have labeled, appropriately enough, Labor Market Condition Indicators, or LMCI.
The LMCI consolidates data from 24 labor market variables.
The researchers who developed the LMCI do provide technical information about how it is constructed -- e.g. "a principal component analysis on the 24 variables and examine the eigenvalues of the covariance matrix. ..." -- but we think our readers would be more interested in what it shows and tells.
And not to get too technical ourselves, we think it's sufficient to explain that a positive value signifies labor market conditions are above its long-run average and a negative value indicates conditions below.
The LMCI Level of Activity indicator has improved significantly during the recovery. But it is still at a level well below pre-recessionary levels.
The LMCI Momentum indicator has been well above average for some time; it started to improve as the recession was in its last stage and has been in positive territory since 2010.
According to the researchers, "based on the historical relationship between the LMCI and the unemployment rate, recent declines in the unemployment rate have overstated improvements in labor market conditions." Additionally, "The increase in the unemployment rate during the Great Recession also overstated the deterioration in labor market conditions as measured by the LMCI."
In other words, the employment / jobs economy isn't doing as good nowadays as the decline in the unemployment rate may indicate but the employment economy also wasn't as bad during the recession either.
Follow-up from last month ...
Referencing a recent cover story from The Economist magazine, last month in this space we addressed how technology is changing how businesses are sourcing workers and how the nature of careers are changing.
Here's a TED talk from more than two years ago that takes those concepts further. Watch, listen, and learn.
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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January 2015 Employment Report
The annual revisions to U.S. Bureau of Labor Statistics (BLS) data certainly makes for an interesting employment and jobs report this month.
Because of updated population estimates, BLS does not publish changes form the previous month's Current Population Survey (CPS), from which the unemployment rate, number of employed and unemployed persons, and other related data are derived. With that caveat, the unemployment rate in January 2015 was 5.7 percent, which was little changed from the December's 5.6 percent. The number of employed persons -- as well as unemployed persons -- in January was greater than in December. More details in the "Household Survey" section at the bottom of this box.
The revised data from the Current Employment Statistics survey (CES) side of the report give a bit more clarity as those data are revised back many years. Generally speaking, the jobs numbers were revised upward, although there were exceptions both for a few months in 2014 as well as for specific sectors or industries.
Total private-sector jobs grew by 267,000 in January 2015, which was not as strong as December's growth of 320,000, nor did it come close to November's gain of 414,000 but much better than a year ago, in January 2014, when private-sector jobs increased by183,000.
The private Goods-producing sector grew by 58,000 jobs in January compared to growth of 73,000 in December, as well as weaker from a year ago (January 2014) when it grew by 90,000.
The private Service-providing sector added 209,000 more jobs in January, which was clearly not as good as December's growth of 247,000 but an improvement from a year ago, January 2014, when it added only 93,000.
The total number of Government jobs wasdown by 10,000. The federal government declined by 6,000 jobs; State government declined by 3,000 jobs; and Local government declined by 1,000 jobs.
Temporary Help Services Roundup
With the final release of the final 2014 numbers, the temporary help services numbers were revised downward. But growth for the year was solid with a 5.6 percent increase from the prior year to 2,767,400. In 2013, temporary help services grew by 4.9 percent.
(if the charts are unclear, click on them to open in a browser window)
For a chart of temporary help's growth from January 1991 toJanuary 2015 and comparing its trend to total employment, click here.
InJanuary, temporary help services lost a little ground with a sequential decline of 4,100 jobs to 2,863,200, which was a sequential decline of 0.1 percent but year-on-year growth of 6.7 percent. The January 2015 decline was the first since, well, January 2014, when it declined by 5,200 jobs. With the downward revision, it looks as if the staffing industry will just have to wait a little longer before breaking the 3,000,000 mark.
InDecember, THS was up 25,000 jobs with sequential growth of 0.9 percent and year-on-year growth of 6.6 percent.
And because of the revision, Temporary help service's market share -- that is its portion of all jobs -- looks as if it took a step back to 2.033 percent in January; in December 2014 it was 2.039 percent, which was an all-time high.
Although January's 5.7 percent unemployment rate was 0.1 percent higher than December's figure, as mentioned earlier, the base population controls were revised so comparisons to previous periods are sketchy as best.
Because of that adjustment, it would be misleading to present comparisons between the underlying data, so we'll dispense with that now and pick it up next month.
But, even with those caveats, the employment-to-population ratio was 59.3 percent in January and up from 58.8 percent a year earlier. The labor force participation rate picked up to 62.9 percent from December's 62.7 percent and incrementally lower from a year ago, in January 2014, when it was 63.0. The number of discouraged workers continued to decline with only 682,000 of them compared to 837,000 a year earlier in January 2014.
NEXT EMPLOYMENT REPORT --FRIDAY, MARCH 6, 2015
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