Monthly Employment Situation with an emphasis on staffing and temporary help services

U.S. Employment Situation
presented by Bruce Steinberg | August 1, 2008

www.brucesteinberg.net

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

Did the R-word start in 4Q2007?

Although GDP, or gross domestic product that is widely considered the definitive macro economic indicator, for 2Q2008 came in at up 1.9 percent, most economists are still pessimistic on the state of the economy. That is because previous GDP figures were revised downward causing some to say that the crevasse the economy fell into is deeper than previously theorized and therefore, it will take longer to climb out of the abyss. And since 4Q2007 GDP was revised to negative 0.2 percent (had been reported as + 0.6), some have theorized that if -- many think it's really only a question of when -- the National Bureau of Economic Research (NBER) marks the current cycle as a recession, it may have started the end of 2007 or early this year.

As for the apparent good news of 2Q2008 GDP coming in stronger than 1Q, it was less than expectations and probably is too early to pop those champagne corks. Actually, 2Q2008 growth would have slipped into negative territory if not for exports. And exports have been given a boost from a weak U.S. dollar that makes U.S. produced goods cheap. That development -- a weak dollar causing growth in U.S. manufactured goods -- has been a positive development for some staffing companies that services that sector. As this report discussed last month, some manufacturers -- especially those who make "big stuff" such as furniture that is expensive to ship -- are seeing growth due to "inshoring."

A time for reflection ...

or in other words -- boy, was I correct.

Under the concept that no one knows how good you are unless you tell them, it has been three years this month (August 11, 2005, to be exact) that I pontificated in a Letter to the Editor published in the Financial Times how the then real estate boom would end. If you recall, real estate prices were still climbing at very healthy rates at the time. Unfortunately, I was right but did not see -- in all fairness, neither did anyone else -- the immense complications and fallout of collapsing real estate values. If you want to see what I said back then, including an explanation of why the IT bubble burst, the letter from 2005 is here.

[continued below]

Current Economic Indicators

Have you had a chance to check out our list of current economic indicators? The most recently updated ones are indicated in red and there is an opportunity to sign up for a free service to inform you when the information is updated.

Where are the open jobs in your local market?

Our Employment Tracking Tool – 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.

Another tool is the Temporary Help Services Interactive Data Book. This tool will enable to benchmark your staffing operation at the local level to see exactly where you are positioned in the market and if your offices are performing up to local staffing sector trends.

Demonstrations of both strategic planning tools are available. View either demo and you get a free copy of "How Do You Measure Up?," an article I wrote earlier this year showing temporary help trends in eight different regions of the country.

There is a direct link to the free PDF download of the article on the last "slide" of each demo.

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

more fan mail ...

"I met, and worked, with Bruce more than 20 years ago when he first entered the staffing industry. His work stood out then and today continues to produce relevant information and great products. Over the past few years he has developed, and improved upon, one-of-a-kind information based on national, regional and local employment developments. He has created state-of-the-art tools that staffing companies can use to make strategic marketing decisions based upon actual market trends." – Wayne Stickles; Spherion Corp. (retired); Springfield (MA) Spherion licensee (former owner); staffing consultant

Click on the link below to see more testimonials ...

View Testimonials

July Employment Report

Quick Recap

The number of jobs continued to decline; in July, the number of total jobs shrank by 51,000. And the bad news didn't stop there -- the unemployment rate jumped by 0.2 percent to 5.7 percent in July since 72,000 fewer people were employed and 285,000 more were unemployed.

Jobs Report

The story about job losses in the Goods-producing sector was, unfortunately, very familiar; it lost 46,000 jobs in July. The sliver of silver in this dark cloud was that was not as bad as the 77,000 loss the previous month (revised for June)

The Construction sector was down 22,000 jobs in most sectors although Nonresidential Building added 4,100 jobs.
The same story in Manufacturing with a loss of 35,000 jobs across most major subsectors. One of the few bright spots was Machinery manufacturing that added 6,100 jobs. Perhaps manufacturers need new machinery as they prepare for new work coming in from overseas.

Looking for more? Check out our podcasts!

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

It should come as no surprise that Natural Resources and Mining continued to add jobs to a steady beat with 11,000 new jobs in July.

Although job growth in the Service-providing sector was only down by 5,000 jobs in July, it would have been a loss of 30,000 if not for the Government adding 25,000 jobs.

The Retail Trade sector continued to process refunds with a loss of 16,500 jobs last month. Automobile Dealers had trouble keeping the cars moving but not former employees and eliminated 8,400 jobs in July.
The Wholesale Trade sector cut 16,900 jobs last month but Electronic Markets and Agents and Brokers, which is relatively small since has less than 850,000 jobs, added 500 jobs.
Financial Activities balanced their books In July with neither a loss nor a gain of jobs. The losses in most Financial sub-sectors and in Real Estate were offset by gains in Insurance Carriers and Related Activities (+2,800) and Rental and Leasing Services (+4,200).
Professional and Business Services were hit hard again last month with a loss of 24,000 jobs with Temporary Help Services taking another major hit (see more below). Running counter to the trend, Computer Systems Design and Related Services programmed in 7,100 new jobs while Management and Technical Consulting Services advised itself to add 4,100 more jobs.
Education and Health Services continued to buck the trend. Educational services only added 5,300 jobs, but after all, they are on summer break. Most Health Care and Social Assistance sub-sectors added jobs except for Child Day Care Services that sent 5,000 jobs home for a nap.

Leisure and Hospitality sector wasn't dealing with any unexpected crowds in July since it only added 1,000 jobs. Actually, a 2,700 job decline in Arts, Entertainment, and Recreation was offset by a 3,700 job gain in Accommodation and Foods Services.
As previously mention, the Government added 25,000 jobs total in July. Although 3,000 federal workers were sent home (most from the U.S. Postal Service), state (+12,000) and local (+16,000) governments continued to add jobs.

Temporary Help Services Roundup

July was another dreadful month for Temporary Help Services. Employment was 2,389,600 and that was down 29,000, or 1.2 percent, from the previous month and down almost 8 percent from July 2007. Since January 2007, the Temporary Help Services sector has lost more than 265,000 jobs.

(if charts below are unclear, click on them to open in a browser window)

Temporary Help Services also lost market share last month -- it was 1.74 percent of all jobs in July, the lowest it's been since October 2003.

If you want to know the official term for this development, call me since it's not printable.

Household Survey

The unemployment rate jumped to 5.7 percent in July (was 5.5 percent in June) because the civilian labor force grew by 213,000 and 72,000 fewer people were working, 285,000 more people were unemployed, and the labor force shrank by 24,000 people .

The employment-to-population ratio held steady at 62.4 percent as well as the labor force participation rate at 66.1 percent in July.

NEXT EMPLOYMENT REPORT -- FRIDAY, SEPTEMBER 5, 2008

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