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U.S. Employment Situation (April 2015)
published by Bruce Steinberg | May 8, 2015

 

 

www.brucesteinberg.net

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

 

 

The Fed doesn't appear to be too concerned ... why?

 

Despite very weak March job growth and Q1 2015 GDP growth that could barely move out of its own way (up only 0.2 percent), the Fed has not indicating any interest to call back previous statements about removing their 'patience' about the timing for raising interest rates.  Therefore, everyone who is watching interest rates does not seem to be focusing on the "if" regarding raising interest rates as speculation persists as to the "when."

 

We have previously discussed some of the economic and employment indicators that the Fed presumably looks at to judge the health of the economy including prospects for inflation and we now are adding another dimension to that review. Addressing and dealing with inflation is an explicit part of monetary policy that the central bank is tasked with managing. FYI, although some believe that wages, salaries and benefit costs are major drivers of inflation, others do not and many monetarists claim the only driver of sustained inflation is excess money supply.

 

With that said, and as these two charts show, growth in wages and benefits have been steady. So, perhaps, the Fed thinks the economy is ready and can support an interest wage hike.

 

Instead of looking at changes with the cost of employment (wages and benefit costs) in terms of dollars and cents, it is probably easier to spot movement if looking at these metrics in terms of baseline indices. We thought it interesting to compare how wages and benefits for some major occupations compare to one another.

 

And since so many of our readers are involved in the staffing industry -- and wage and benefit growth can act as a proxy for labor shortages and skill demand -- we included a trendline for office and administrative support occupations. Note how the wage and salary index for that classification has been higher than for all workers indicating strong demand for those types of workers.

 

Incidentally, inflation currently remains below the Fed's target rate of 2 percent. As long as inflation remains below their target level, they seem reluctant to raise interest rates despite but -- hopefully -- the nation's central bankers are aware of the long-term harmful effect of the current, loose monetary policy.  Like the alcoholic who 'just has to make it through the day,' the Fed is grappling with their essentially zero interest policy and reluctant  to give up the habit should the economy start to experience the delirium tremens. Or to paraphrase from the movie Airplane, the Fed realizes whenever it changes course, it will be 'choosing the wrong day to give up drinking." 

 

And thank you ...

 

Last month, we asked for your feedback regarding a change in our URL as well as our website design and layout.

 

The results are in and the changes to both will be made -- eventually. As several respondents pointed out, we still have a lot of work to do on the website design. But, client work takes priority, so it will be some time before the changes are completed. Like the Fed, it's not a question of "if," but of "when." Or, in the words of Bret Maverick, "I'm workin' on it." (Reference is here at "Shady Deal at Sunny Acres".)

 

 

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, Friday, May 8. 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

 

April 2015 Employment Report

Quick recap

 

Although  it appears that job growth rebounded nicely in April, the result was helped by March's numbers being revised as worse than initially reported last month.

 

April job growth was 223,000 nonfarm jobs, which was certainly looks like a nice improvement from March's revised job growth of only 85,000, but March was revised downward by 41,000 from first reported. (Last month, March job growth was reported as up 126,000.) If March's initial number would have been unchanged, then April job growth would have only been growth of 182,000. A year ago, in April 2014, total nonfarm jobs expanded by 330,000.

 

On the other side of the monthly employment situation, the unemployment rate ticked down to 5.4 percent in April and there were 192,000 more employed persons. For more detail about this aspect of the monthly employment situation, see the "Household Survey" section at the bottom of this box.

 

Jobs Report

 

Total private-sector jobs grew by 213,000 job in April, which was an improvement from the revised growth of 94,000 in March (initially reported last month as up 129,000); a year ago, in April 2014, private-sector generated 313,000 more jobs.

 

The private Goods-producing sector grew by 31,000 jobs in April after contracting by 21,000 in March (initially reported as down by 13,000 jobs);  a year ago, in April 2014, this major sector grew by 58,000 jobs.

  • It should come as no surprise that declines in Mining and logging continued with a drop of 15,000 in April after descending by that 12,000 in March and losing 14,000 in February.

  • Activity thawed out  in the Construction sector in April by building 45,000 more jobs, which was clearly an improvement from the 9,000 job decline in March and even better than the 41,000 it added in April 2014.

  • Manufacturers appeared to still have cold feet with growth of only 1,000 jobs in April after neither losing or adding jobs in March. Jobs in Durable as well as Nondurable goods showed little movement as well.

The picture in the private Service-providing sector looked a little better -- little being the operative word -- in April with the addition of 182,000 jobs, which was a nice improvement from the 115,000 job growth of March (initially reported last month as up 142,000); a year ago, in April 2014, this sector added 255,000 jobs.

  • Hiring in the Retail trade sector tapered off to a gain of 12,100 in April, which was less than half the 24,500 it added in March.

  • The Wholesale trade sector took a few steps backward with a decline of 4,500 jobs after adding 9,900 in March.

  • Hiring picked by some speed in the Transportation and warehousing sector with an increase of 15,200 jobs in April after adding 8,100 in March. 

  • Financial activities employers added 9,000 jobs in April that was a little better than the gain of 7,000 in March.

  • The Professional and business services sector added 62,000 more jobs in April that clearly better than March's growth of 35,000.  Computer systems design and related services added 9,100 jobs in April that was more than double the 4,300 it added in March.  Management and technical consulting services experienced a an increase of 6,000 after adding 4,200 jobs in March; however, Architectural and engineering services added 3,700 jobs in April that less than the 5,100 it added in March.

  • The Education and health services sector added a total of 61,000 jobs in April with the sector's highly seasonal Educational services sub-sector contributing 5,200 more jobs. Home health care services was up by 2,700 in April, which was weaker than the 4,800 increase of March.

  • The party picked up again in the Leisure and hospitality sector with 17,000 more jobs in April after discounting (a.k.a. declining) by 6,000 jobs in March.

The total number of Government jobs was up 10,000. The federal government was up by 2,000, State government followed suit with a 1,000 jobs increase; and Local government added 7,000 jobs.

Temporary Help Services Roundup

 

Temporary help services continued to recover from the declines of January (down 7,800) and February (down 4,400). Counter to the overall job data revisions, the revisions to the February and March temporary help services numbers were an improvement from the numbers released last month.

 

In April, the 2,880,400 temporary help services jobs were due to a gain of 16,100 jobs, which was 0.6 percent sequential growth and 5.5 percent year-on-year growth.

 

And temporary help service's market share -- that is its portion of all jobs -- jumped to 2.04 percent in April from March's 2.03 percent and is higher than one year ago, in April 2014, it was 1.97 percent. April's 2.04 percent (bringing it out a few decimal points, it's 2.0375) market share is the highest it's ever been -- ever.

 

For a chart of temporary help's growth from January 1991 to April 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

 

April's 5.4 percent unemployment rate was 0.1 percentage point lower than in March as the result of positive movement with its underlying components.

 

There were 192,000 more employed persons in April while there were 26,000 fewer unemployed persons and the number of people no longer in the workforce increased by only 19,000. In other words, because a lot more people found jobs and the number of unemployed persons declined -- and a not too many more were not considered as in the labor force -- the unemployment rate moved lower.

 

The employment-to-population ratio was unchanged at 59.3 percent in April and up from 58.9 percent a year earlier. The labor force participation rate incrementally declined to 62.8 percent in April from March's 62.7 percent and was the same as year ago, in April 2014, when it was also 62.8 percent. The tnumber of discouraged workers resumed its downward trend in April with 756,000 that was down slightly from the 783,000 in April 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, JUNE 5, 2015

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