Chris Wellington “The Recruiting Guy”, President, The Wellington Group

Wow, I don’t think this was at all what people were expecting to see and read about, DOL News Release. Most had predicted as high as 11% unemployment and continued doom and gloom in the job market. The impact of a much stronger (lower) unemployment number is not hitting the markets yet, the DOW again for a second day has started off below 10,000.

So what is truly in this DOL report and what can we take away from it? First, the overall number has not changed and is in fact negative by 20,000 more unemployed Americans. While job losses have slowed the job increases have not caught up yet. Healthcare continues to be a strong and growing sector, opposite to the continued decrease in construction jobs in the US. Manufacturing jobs rose by 11,000 while an even bigger gain was seen in retail jobs, 42,000. Transportation took a hit, but it’s such an undefined or obscure category that needs further analysis of the data points and types of jobs lost to understand the root cause. An interesting statistic on job increases was the number of new Government hires in January. 33,000 people put to work, with just less than half of that being the 2010 Census project, so more hires will be coming in this sector for sure.

One great sign for professionals in the recruitment and more so temporary labor industry, 52,000 new heads out in January. For those who have studied this piece of the overall trending data going back generations now, temporary help is a first key indicator of jobs coming back. It’s a “dip your toes in the water” scenario, if you will, by many employers to see what impact that person(s) may have in driving ROI to the organization. A great data point which is not tracked nor communicated well is the ratio of temporary labor headcount turned into full time employees. Since September, the temporary labor job number has increased by 247,000.

Ok, if you have looked at the numbers and are hearing the news then 9.7% does not seem correct. We went to the negative more but had a decrease in the total unemployed? My speculation for this is twofold. First, more people are getting out of the mainstream job market and starting their own businesses. Not hiring others, but sole proprietors working now in every niche from drug development consulting to accounting services and even a major spike in network marketing enrollees. Secondly, some people have simply quit looking for a job and their unemployment has run its course. As a result they are not reporting weekly status updates to the Fed, and as such the DOL can’t report data it does not have.

In the DOL’s own release 2.5 million people were not counted as “They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.” These are mainly disgruntled Americans who feel there is no work for them.

Overall, it is exciting to see that we are back in a more “normal” range for unemployment. I am a believer that levels we have been seeing over the past 6 months are the new norm. 4-5% unemployment rates are in the past or the distant future until all the uncertainty surrounding healthcare, small business (individuals making over $250,000) tax rates, lending and other impending items are worked out between Congress and the Whitehouse.

Chris

Chris Wellington “The Recruiting Guy”, President, The Wellington Group

Released just over three hours ago and already a lot of web-chatter, news announcements, emails and calls to my office about the latest job numbers from the US Department of Labor. The summary report can be found at Department of Labor New Release.

So what is all the hype about? 331,000 reported job losses for the month of July. Now that may seem like a very high number but its more “normal” than the losses from November 08 to April of this year, which averaged almost twice as many at 645,000 job losses per month. Total unemployment was down by.1 percent to 9.4%, not a significant change. The sector which had job gains continues to be Health Care with an increase of 20,000 jobs.

Since my ear is constantly to the ground for the staffing and recruiting industry, I had to take notice and point out the impact of the past 10 months. The temporary help market has lost 844,000 jobs while the entire business services sector has been impacted by 1.5 million jobs lost. The release notes this decline has lessened Substantially over the past three months. These numbers reflect the contract, contract to hire and consultant employment areas and not so much the direct hire or executive search services.

While this appears to be good news, the job losses we are still seeing in the staffing and recruitment industry to me is a key indicator that the US is yet to hit the “bottom” of the job loss portion of this economic turndown. In studying trending data for the last 25 years, until we begin to see a rise in staffing numbers we have yet to make a full turn in the positive. With staffing companies (IT, Engineering, Administrative, Day Labor, Etc) still laying off internal staff I don’t see a lot of confidence or stability in overall employment for the US.  

So, is it good news that perhaps the US is slowing on the job loss front? Unemployment seems to have stabilized for now right at 9.5%, not at the 10% plus which so many news media and talk show host predicated. Unfortunately I foresee these numbers rising again for a short period of time this fall as government and state budgets get approved, many of which will call for job cuts.

Chris