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

U.S. Employment Situation (January 2010)
presented by Bruce Steinberg | February 5, 2010

named as a Top 100 Influencer in HR-Recruiting

www.brucesteinberg.net

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

How bad was it ...

With the release of the January employment situation this morning, we get a better idea of what really happen to jobs in 2009 since the data have undergone annual revisions. But does that tell the whole story? (snarky comment: maybe referring to job loss as a "hole" story is more appropriate.)

Sure, the numbers show that 3.6 million jobs were lost in 2008 and another 4.8 million in 2009 for a total of 8.4 million jobs lost since the onset of the recession. But, what about the jobs not created if the economy was in growth mode? Using 2004-2007 as a basis, which averaged around 185,000 new jobs per month, in the 24 months of the recession, there could had been possible job growth of possibly 4.4 million if there was no recession. Therefore, the current employment economy could be down as much as 12.8 million jobs or more.

And you may have seen other information about the unemployment rate, which is still quite high at 9.7 percent but started to head in the right direction in January. In addition to the unemployed (around 15 million), there are those who are currently want a job but don't have one (around 6 million, depending upon the definition), and those who are working part-time for economic reasons (another 8 to 9 million). Simply adding those numbers together could be a little misleading since, among other factors, some of that count includes people who have returned to school in an attempt to make themselves relevant in the new emerging world of work.

But, those are the numbers. Politics aside, because regulators 'didn't tale away the punch bowl while the party was in full swing', certain sectors -- housing and financial services come to mind -- may have over expanded before they burst. So even factoring out the rise in jobs and subsequent fast decline and rising unemployment brought about by a bubble that possibly could have been avoided, there are still a many millions of jobs that will need to be filled and millions more people who will need to find those jobs.

As the employment economy approaches that corner to turn, it means that there will a lot of jobs and workers that will need to be put together. It really can mean very good times ahead for those in the employment services sector. Despite economists saying it will be some time before the employment economy recovers, here is some historical evidence that shows that the deeper the decline, apparently the steeper the rise. Here is a very interesting chart that shows that trend. (FYI, I first posted a tweet about this chart several weeks ago.)

Yes, there is such a thing as a free lunch ...

One way to keep on top of developments in these turbulent economic times is to pay closer attention to economic developments and indicators. Although this is another pitch to visit my Economic Indicators webpage, we are giving away a calendar marked with the dates of key economic and employment data releases throughout 2010. We are publishing a 12-month calendar with key economic release dates and it should be ready very soon. If you would like a copy, just shoot me an e-mail or pick up the phone (wow -- that's certainly a radical idea to start the year with!) and call me at 571.482.9799, and I'll let you know when it's completed and available for download.

The Signature Back Office Solution is a complete suite of support services -- payroll / financial services, insurance services, group benefit plans, operation / back office support, as well as marketing support -- for staffing companies.

You tell client companies to let you handle their staffing needs and all that entails such as recruiting, screening, possibly training, and paying workers so your clients can concentrate on providing their product or service. Well, isn't it time to take your own advice?

Named as a Top 100 Influencer in HR-Recruiting

Click on the graphic below to read why Bruce Steinberg was included on this auspicious list.

How do my strategic planning products perform?

"I have enjoyed working with the Employment Tracking Tool system. Your employment tracking tool has given us great localized information on which industries to move forward with for my existing commercial business, which places Administrative/Clerical, Engineering and Accounting personnel." – Marsha Murray, CPC, Murray Resources (Houston, TX)

View more Testimonials

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.

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

January 2010 Employment Report

A not a so quick recap ...

What really happen with occurred with jobs 2009 requires more than a quick explanation. Part of the statistical model that the government uses for its monthly estimates of jobs includes what is called a 'birth-death' model that takes into account new business formation and companies going out of business. In addition, once a year, previous monthly estimates are revised using actual records for nearly all employers. Well, apparently the birth-death part of the model miscalculated how many businesses ceased to have jobs and jobs for 2009 were overestimated throughout the year. With the publication of the January 2010 employment situation, all previous job counts were revised downward -- to the tune of around 1 million.

The unemployment rate dropped nicely to 9.7 percent in January from December's 10.0 percent. Although data adjustment makes month-to-month comparisons a little dicey, more good news is that the number of persons unemployed declined by 430,000, as the labor force expanded by 111,000 while the number of people employed was 541,000 higher in January than December. And those not in the labor force declined by 202,000.

Jobs Report

The total number of jobs lost in January was only 20,000 with the private Goods-producing sector responsible for all of that loss and then some since it lost 60,000 jobs while the private Service-providing sector, which has more than 85 percent of the economy's jobs, grew by 48,000. The Government sector was reduced by 8,000 jobs.

Jobs in the Manufacturing sector posted a gain (yup, a gain) of 11,000 jobs with Durable Goods (mainly in Transportation Equipment but also Computer and Peripheral equipment manufacturing) up by 13,000 jobs as Nondurable Goods was down by 2,000 jobs.
The Construction sector continued to lose jobs with a total loss of 75,000 last month. Especially hard hit was Specialty Trade Contractors that lost 54,400 jobs in January.

Looking for more? Check out our podcasts!

Podcasts of the current employment situation will be available by 4:00 p.m. ET today, February 5th. 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).

Mining and Logging brought 4,000 more jobs to the surface in January with the mining part adding more than its fair share since the logging part chopped down a few jobs.

Clearly the better news was in the private Service-providing sector that added 48,000 jobs in some of its major sub sectors.

The Retail Trade sector ended up posting 42,100 more jobs in January than December.
But the Wholesale Trade sector continued to contract and eliminated 8,600 jobs.
Transportation and Warehousing was still moving jobs out those big doors with a loss of 19,000 jobs; although several of its sub sectors were essentially unchanged with little movement in either direction, the big loser was Couriers and Messengers was crashed by 23,200 jobs, or about 4.3 percent of its total job count. Is anyone surprised?
And no surprise that the Financial Activities sector lost count of 16,000 jobs in January.
Professional and Business Services did okay with a gain of 44,000 jobs. Sectors doing particularly well were Computer Systems Design and Related Services that added 7,100 jobs to its hard drive. And has been the case in recent months, much of the improving performance in this sector can be attributed to the better environment in Employment Services, specifically Temporary Help Services that added 52,000 jobs in January (see more on this below).
The same good story over at Education and Health Services. Educational Services, which is highly seasonally and January is not part of its growth season, declined by 2,000 but Health Care and Social Assistance added 17,100 new jobs in most major sub sectors including Home Health Care Services that added 3,600 jobs in January.

But, there still wasn't much to celebrate in the Leisure and Hospitality sector that lost 14,000 jobs spread throughout most sub sectors although Food Services and Drinking Places added 3,500 jobs, possibly as people were either celebrating their getting a job or drowning their sorrows because they didn't.
The number of Government jobs declined by 8,000 as the Federal Government added 33,000 jobs, State Government took away 18,000 jobs, and Local Government shrank by 23,000 jobs.

Temporary Help Services Roundup

Temporary Help Services continued to recover. Temporary Help Services jobs were up 52,000 to 1,971,800 in January, but the good news doesn't stop there. Although Temporary Help Services is down 677,800 jobs since its peak in December 2006, it's up 247,400 in the past four months.

In January 2010, Temporary Help Services was up 2.7 percent from December and down only 0.5 percent from January 2009.

(if chart is unclear, click on it to open in a browser window)

And Temporary Help Service's market share also gained ground. In January, Temporary Help Services jobs were 1.52 of all jobs that is a level it hasn't experienced since November 2008.

Household Survey

The falling unemployment rate is certainly welcome news, but it is also due to adjustments in the population estimates. As a result of a labor force that grew by 111,000 to around 153 million while the number of them employed also grew by 541,000 and the number of unemployed persons declined by 430,000. Those not in the labor force declined by 202,000.

The employment-to-population ratio rose to 58.4, a gain of 0.2 percentage points from the previous month while the labor force participation rate incrementally grew by 0.1 to 64.7 percent.

NEXT EMPLOYMENT REPORT -- FRIDAY, MARCH 5, 2010

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