The Job Market is Soft But Growing
While overall employment fell in June for the first time this year (largely due to the winding down of the federal census employment), private employment (exclusive of government jobs) increased for the 6th month in a row. ADP reports the addition of an estimated 13,000 workers to private payrolls in June, indicating slower job growth than expected. The Commerce Department revised the GDP to 2.7% from 3%, however CEOs and staffing companies see hiring increased.
Companies are increasing hiring and hiring budgets
The American Staffing Association’s staffing index rose to a reading of 90 in June, up from 89 in May, and up 25% from the previous year. According to a recent TalentDrive survey, 44% of respondents report increasing the hiring budget for the last year and half of them report that the second and third quarters will be the most active hiring periods. More than 75% of companies say they are unprepared or only moderately prepared for the hiring increase.
The Monster employment index jumped sharply in June, up seven points to 141 to indicate rising online job demand. Thirteen of 20 industries rose led by accommodation & food services. Five industries were flat with only retail trade and finance showing a decrease.
CEOs polled in the June 23, 2010 Business Roundtable Second Quarter 2010 CEO Economic Outlook Survey project hiring. “Our member CEOs plan to continue hiring and expect improved sales,” said Ivan G. Seidenberg, Chairman of Business Roundtable and Chairman and CEO of Verizon Communications. “That said, our CEOs are demonstrating some caution in the area of capital expenditures, with fewer planning to increase spending and more keeping it level.” The CEO survey has been a consistent indicator; this graph compares CEO survey forecasts to actual GDP growth.
Reportedly 3% growth is needed to create enough jobs to keep pace with population growth, and many economists say we need 5% over the period of a year to reduce the jobless rate by one percentage point. Growth has averaged 3.5% over the last 3 quarters.