Job Hiring a Key Economic Indicator Is Up

The Staffing View

On business, the workplace and employee relations

_June, 2010

 

Four Reasons to be Optimistic About the National Economy

Whether you’re an employee or employer, in a job search or waiting for hiring to pick up, there have been some alarming signs of late about the economy The stock market experienced a sharp correction in late May, the European economy is in crisis and it’s unclear what the impact will be from the oil spill in the Gulf of Mexico beyond the southern coast

Mark Zandi, chief economist at Moody’s Economycom, sees a number of threats to the US economic recovery, but also reasons to believe it will continue and ultimately strengthen Zandi spoke to a group of New England business leaders at the spring conference of the New England Economic Partnership last month

1 The job market is becoming engaged Since the beginning of the year close to 500,000 jobs have been created and they have been broad-based Half of the more than 300 metro markets in the US are growing Additionally, Zandi says large and mid-size businesses are doing well Corporate profit growth is up about 30 percent year-to-year which is “about as strong as it’s ever been,” says Zandi, recognizing that the comparison numbers from last year are also historically weak But as they are growing their profits companies are eliminating debt leaving them with strong balance sheets

2 Economic activity is slow relative to demographic trends In the car industry, for example, current sales activity is about 11 million per year, compared to the historical average of about 15 million units per year Zandi says the auto industry was in a “spent-up demand” going into the recession and now the industry will benefit from “pent-up demand” That should push sales back above 15 million per year within a couple of years

The demographic trend in housing is also favorable New construction is running at about 600,000 units per year The demand for housing is at about 135 million units per year About 185 units is more the normal year Zandi says we’re currently working off inventory from the buildup of the past decade It will take about two years to work that inventory off, though if the job market picks up we’ll see more household formation He noted that much of the excess inventory is regionally fixed in Florida, California, Nevada and Arizona



3 The US has become more competitive globally “Any manufacturer that has survived what we’ve gone through should be ready to go,” he says Though the European economy will likely go back into recession and Europe accounts for about 20 percent of all US exports, he says our other trading partners in the Asian and Latin American economies are doing well, as is Canada, the single largest importer of US goods

4 Policy Zandi believes that government policy makers will do whatever it takes to make sure the expansion takes hold With the jobless rate still around 99 percent and inflation flat, there is no reason for the Federal Reserve to raise interest rates Policy makers have also shown a “surprising willingness” to get the expansion going through steps such as the federal stimulus package, extending unemployment insurance benefits and extending the first-time home buyers tax credit

 

University Study Spots Hot Careers for the 2010s

The University of California, San Diego has produced a new study sure to attract the interest of college grads, people in a job search or employees considering a career change The report forecasts the careers with the best employment prospects for this decade The overall advice of the study is to “go niche” in order to enrich your job prospects Knowing where to look and honing your skills just might be the right strategy for finding the career that is best for you Included among the top career fields were:

Health information technology Health information technicians are responsible for organizing medical records, ensuring that charts are accurate and complete, as well as updating patients’ files electronically Due to government initiatives in recent years, the healthcare industry adopted an advanced technology system for managing and utilizing health information This is fueling a demand for health information technicians who can support medical record reform Technicians are needed for emerging jobs such as healthcare integration engineer, healthcare systems analyst, clinical IT consultant, and technology support specialist

Clinical trials design and management for oncology Biopharmaceutical drug companies have more than doubled investments in research and development in the last decade, in part because of an aging and sedentary population Meanwhile new markets for therapeutic and curative drugs are opening in developing countries To manage how drugs are developed and brought to market, employees are needed to design and operate clinical trials, especially testing new cancer drugs

Data mining Data mining is the technique of extracting specific types of information or patterns from large databases, such as data warehouses It’s a rapidly growing industry because of the explosion of available data Accordingly, more employees are needed to drill down, analyze and interpret the data Career opportunities exist in a wide range of sectors such as advertising technology, fraud detection, surveillance, web mining, scientific research and law enforcement

Occupational health and safety Occupational Health and Safety Specialists (OHSS) analyze work environments in order to prevent injury They’re needed in industries involving chemical, physical and biological agents The specialists’ job is to keep the workplace accident-free by researching safer, healthier and more efficient ways of working

Spanish/English translators and interpreters As the rapid growth of the Hispanic population continues in the US, Spanish translators are experiencing many job opportunities Demand is strong for interpreters and translators in the health care and legal fields, for example, due to the critical nature of the information Growth in employment within this field is projected to increase in the United States by 22 percent between 2008 and 2018

 

In the Peach State, Job Growth Means

Recovering from Housing’s Sharp Fall

While economists are in agreement that all 50 states have begun to recover from the recession, the speed at which employers start adding employees varies from region to region Economic expansion depends upon the ability of small businesses to get credit to grow That ability depends upon the health of local banks and their willingness to lend And their willingness to lend is influenced by how well they survived the recession

In Georgia few people will be surprised if local bankers are proceeding cautiously According to a report by Wells Fargo Investments, the housing market in Georgia fell as hard as in any state in the country and rippled through other industries The Atlanta market, for example, led the nation in single-family housing starts every year from 1995 to 2005 But in 2009, after the bubble burst, single-family permits fell more than 90 percent from their highs in 2006 and multi-level permits crashed nearly 95 percent from where they were in mid-2005 Not surprisingly, housing prices also tumbled, dropping nearly 20 percent from their peak

The housing collapse placed an enormous burden on community banks Georgia led the nation in bank failures during 2009, with 25 banks being seized by the FDIC and either closed or sold to other institutions, most of them in the Atlanta metro area A contributing factor is the area’s fragmented homebuilder market Greater Atlanta is made up of 28 counties, each with its own guidelines for development Consequently community banks are more involved in lending for new building

According to Wells Fargo, many developers were the single largest clients of come community banks When the market began to slide and their projects went uncompleted, that led to insolvency issues at many of the community banks Compounding the problem is that many of the developers tried to build companion shopping centers near their residential projects and the banks financed those plans as well

Every state economy is influenced by national trends But in Georgia, how soon will community lenders be willing to take on new risk with small businesses?

 

Job Gains Return in the Staffing Industry

Here’s a bright comeback story: temporary and permanent staffing industry employees are finding jobs The American Staffing Industry reports that in the first quarter of this year the nation’s staffing companies employed an average of two million temporary and contract workers per day

That’s a 08 percent increase compared to the same three months in 2009, which isn’t eye-popping, but is still a better performance than a year ago when the ASA reported a year-to-year decline of 28 percent compared to the first quarter of 2008 In fact though the industry has a long way to go to get back to its 2005 fourth quarter peak average of just over three million temporary and contract workers per day, this year’s first quarter numbers mark the third quarter in a row in which average daily employment exceeded two million after falling below that level during the first two months of 2009

"Staffing employment started to grow last July as the economy began to recover from the recession," says Richard Wahlquist, ASA president and chief executive officer "But the staffing industry took such a massive blow early last year — demand dropped 30 percent — that it has taken months of improving conditions to show up in year-to-year comparables Over the past several months, the staffing industry has been creating more private sector jobs than any other industry in the US We are optimistic that America's staffing companies will continue to show robust job growth in the second half of this year"