Unearthing the meaning beneath monthly employment data is a difficult job, but someone has to make sense of the numbers. Look for this column to decipher the nuances.
For most HRO Today readers, knowing what’s going on in the labor market isn’t just “nice to know” information. As we make decisions about how to manage human resources, whether we are an HRO service provider or a customer, we have to look outside our own office windows to see what else is happening out there. And right now, there’s a lot happening!
In case you’ve missed the onslaught of headlines or concerned expressions from many of the country’s news anchors, national unemployment is up, jumping to five percent in December. Leading the unemployment trend higher are retail and construction jobs, with a combined job loss of 65,000 in December. TV’s lack of fresh entertainment due to the writer’s strike is also thickening the plot and plight of the job market, with the motion picture and sound recording industries claiming a loss of 12,000 jobs in December—not great but it’s not all bad either.
It’s good to be an accountant, computer whiz, or medical genius because these professionals are in demand, and in many cases they are stronger than ever. Similar to 2007, this year will likely be the year of the skilled worker, and in these areas there are plenty of job opportunities. For example, if you’re in information technology and you live in Washington, D.C., unemployment is less than two percent—not the five percent national unemployment average.
In fact, if you take away the 7,000 jobs lost in the credit intermediation market due to the mortgage crisis and the 12,000 losses in production/motion pictures due to the writers’ strike, you get about 40,000 jobs created in December vs. 18,000 reported by the Bureau of Labor Statistics. What the newscasters don’t look at are the one-time or short-term anomalies that affect the monthly numbers.
It is hard to deny, though, that the labor market sentiment is deteriorating. According to the Conference Board survey, the share of respondents saying jobs are hard to get rose to 23.5 percent in December from November’s 21.4 percent. This is the highest in roughly two years. Also, the percentage of respondents calling jobs plentiful came in at 22.7 percent, down from 23.3 percent the month prior and the lowest since late 2005 (see chart).
So, as we sit atop 2008, with another 12 months of jobs reports to look forward to, what should our outlook be? It is certainly easy to jump on the doom-and-gloom bandwagon, but remember, in late 2005 we also hit five percent unemployment, yet we had three percent GDP growth and we still were not in a recession. With all of this cloudiness, what seems to be clear is that although these numbers are very important, taking the time to break them down and understand the bigger picture is going to be just as important, and each month I’m going to do just that.
In case you haven’t caught on yet, I’ll be writing this regular column to serve as a forum for us to look into what’s happening in the job market—piece by piece and sector by sector. And while there is data out there that greatly interests me, what is more important is uncovering the job market data and insights that are of most interest to you. So, feel free to e-mail me your inquiries, thoughts, concerns, comments, and recommendations on what you would like to read about each month, and I’ll be sure to incorporate it in future columns.