Pundits and experts alike have been vociferous in their acknowledgement that the economic growth leading up to the 2008 Recession was largely unsustainable, going so far as to condemn the governmental and financial leaders of that time for not seeing the writing on the wall. One organization who has been keeping their eyes on the writing has been The Conference Board, which released it’s July 2012 Help Wanted OnLine (HWOL)report today. So, what does the writing say, exactly? That depends on your interpretation of the data, and I would urge you to follow that link and interpret for yourself.
Employment and Online Job Ads
First Impressions
At first glance, you can’t miss the headline- “Online Labor Demand down 153,600 in July”, and you’ll quickly see that while Consumer Confidence is up very slightly, the Measure of CEO Confidence is down sharply along with the other economic trends they capture. As you dig deeper, you’ll find that nearly all significant occupation groups showed a decline in job postings, sparing on Sales opportunities; and that 13 of the 20 Major Metropolitan areas showed a drop in online career opportunities. Again, the first impression here is obvious- companies are posting fewer jobs, and that’s a bad sign for short term economic growth.
The Silver Lining
Further on in this report, and upon deeper examination, there are both positive and curious indicators as well. One positive sign is that nearly all of the largest metropolitan areas have posted substantial growth in online job ads since the end of the recession in June 2009, with more than half showing growth exceeding 100%. Sometimes a longer term lens is required to see sustained growth.
The other positive sign is something I mentioned earlier in this post- the increase in sales-related job postings. Certainly, this should be viewed as a sign that companies believe that there is money to be made in this economy- though whether that growth is driven by business-to-business or direct-to-consumer sales is unclear. That being said, if there is a belief that corporations and/or consumers have the money to spend, then sales will be the engine that drives demand and ultimately growth in production and operations employment.
A Penny for Your Thoughts
In my review of the report this morning, I was struck by the second chart, which I’ve included at the beginning of this article. When examining this chart, I could not help but notice that total employment has grown by just shy of 4,000,000 people during the 28 months since the lowest point in March of 2010, including a current trend of 21 straight months of unbroken growth.
Coincidentally, if you look at the 28 months preceding the peak of total employment in February or March of 2008, you’l find that total employment grew a little over 3,500,000 people. Here’s where I need some help- if growth prior to the recession over two-plus years was dictated by unsustainable market conditions, what does that say about the even faster employment growth that we are currently experiencing?
Thank you for summarizing this Jason.
As someone who works with client helping them to find qualified talent through appropriate venues, I see certain positions like engineering, IT and sales difficult positions for my client to fill. Part of the reason is that there are not enough trained individuals in these job categories and another reason is that the client demand for finding these people is so great, that demand is outrunning the supply. I can’t speak to this on an international scope, but as a country we need to better align academia with business, whereas both are working together to project and plan what occupational needs should be in place based on our advancements in technology and research. I don’t profess this to be “the solution” but IMHO, I believe this to be one of the problems that got us here and more so what continues to be a hindrance in the high number of unemployed people.
As someone who is a volunteer in a job seeker group, I can tell you that I have spoken to people who have been unemployed for over two and three years. This is, in itself disturbing, however I can tell you that a few of them had jobs that are just not in demand any longer or companies have learned to function without, leaving these people with very few to no options.
Great perspective as always Karen! I’m glad you included some optimism in your outlook, and agree that we will see many jobs return to the US in the decades ahead. I always have to raise an eyebrow when I listen to current news reports that reflect that the economy is doing better because Americans are spending more and borrowing more. If I recall correctly, inflated markets that included extending consumer credit beyond reasonable limits was one of the core factors leading to the recession. And now the health of our recovery is being measured by increased consumer spending and borrowing? Is there a major disconnect here or am I missing something obvious?
Rich, thanks for chimiing in and sharing those figures- very interesting indeed. I certainly have to agree with you that trying to accurately assess unemployment rates or participation rates is an exercise in futility it seems. However, those numbers don’t have any affect on the Total Employment numbers shared in the graph- which indicate the actual number of people on payrolls in the US. While the economy is sluggish at best right now, we still added the same number of actual jobs in the past 28 months as we did in the 28 months leading up to the peak. Do you feel that this growth is more sustainable than it was pre-recession, or do you forsee that this growth will also come to a halt in the near future?
As someone who works in talent acquisition, I believe these numbers and the answers to these questions can have significant impact on markets- both positive and negative. The underlying question for me is this- Should we expect to see employment rates and economic growth mirror the pre-recession era, an era defined by uncontrolled risk in the markets and an era, in retrospect, that experts widely agree was unsustainable?
IF the answer to that question is YES, then how do we generate that growth in a sustainable way? If the answer to that question is no- then how do we move forward within this new economic reality?
Big questions!
Job growth over the past four years is a mirage. The population has increased by approximately 8 million yet the number of employed has stayed the same and the participation rate and employment ratio are both down.
The only number that has increased is the number of people that the BLS keeps stashing away in the Not in the Labor Force category. Almost 7.5 million additional people have been classified as Not in the Labor Force since Jan 2009 and they are not counted in the unemployment rate. These are people who have lost their jobs and given up, retired, gone back to school or stayed at home with the kids because there is no work. If the BLS calculated the unemployment rate the way it was years ago it would be much higher and more realistic.
BLS Numbers
Population
Jan 2009: 234,739
Jun 2012: 243,155
Civilian Labor Force
Jan 2009: 154,140
Jun 2012: 155,163
Employed:
Jan 2009: 142,221
Jun 2012: 142,415
Unemployed:
Jan 2009: 11,919
Jun 2012: 12,749
Not in Labor Force:
Jan 2009: 80,599
Jun 2012: 87,992
Participation Rate:
Jan 2009: 65.7
Jun 2012: 63.8
Employment Ratio:
Jan 2009: 60.6
Jun 2012: 58.6
Some believe that Companies hire when consumers spend. Consumers spend – or don’t;
I don’t buy that.. if only it were so easy.. I believe that the job market is based upon Greed. Companies continue to Push our jobs overseas, for the wonderful and amazing Tax Rebate and cheap labor… they get rewarded for sending our employment overseas; lowering government oversight, so they can use cheaper material for unsafe and shoddy products..
Think about this, even when America was facing one of the worst long term unemployment in history between 2003 – 2008 – we were led to believe that Employment was only 4.5% and that the job situation fantastic, that there was a huge war for talent, and pending doom.. Even though the Job situation in reality was already starting to be one of the worse in recorded history.. as we lost more jobs, and has little job gains during that time frame.. (bush didn’t count the long term employed or underemployed, and unemployment expired much sooner than it does today.) – Long term unemployment in 2003 was already at Pre Word War 2 Levels.. and many were not aware how dire it was..
So, The consumers were spending like crazy, but we losing jobs at record numbers. they were being sent overseas, or we were bringing in more foreigners at a lower cost to do the job! Ultimately we have cheapened our labor so badly that companies are unable to have American’s purchase their products, because they can’t afford it.
China and India fatigue, as more companies are insourcing their jobs back home..Yahoo and SBC are two that have started to do this.. but, they are also still now looking closer to home.. Mexico, South America. Closer time zone, and more western customs and business ideologies make it easier to work there..
But, eventually, like we did in India, we will create the wages to be more competitive to America.. so eventually, (in our lifetime) we will see more jobs return home..
We want it faster.. well, get rid of the Billion dollar tax write offs that profitable companies continue to have to source our jobs overseas, and we will see the jobs come home..