May 9, 2011

Most Robust Growth in 5 Years, Yet Mixed Messages about the Employment Outlook

Staffing & Employment News

Most Robust Growth in 5 Years, Yet Mixed Messages about the Employment Outlook

Friday’s employment situation report released by the Bureau of Labor Statistics was stronger than anticipated with non-farm private payroll showing increased employment of 268,000 last month, surpassing March’s strong showing of 231,000. This growth is the most robust in five years, and marks the seventh straight month of employment increases. Nonetheless, jobless rate climbed and government jobs fell by 24,000.

The 43,000 surge in jobless claims is explained by various factors but nonetheless was higher than last month. The unemployment rate went from 8.8% to 9.0% month over month. The longer trend remains positive: The economy has added 2.1 million private sector jobs over 14 consecutive months, including more than 800,000 jobs since the beginning of the year. The unemployment rate rose to 9.0 percent, but remains 0.8 percentage point below its November level”, according to Austan Goolsbee, Chairman of the Council of Economic Advisors.

Jobs Chart May 2011 Council of Economic Advisers

Graphic: http://www.whitehouse.gov/blog/2011/05/06/employment-situation-april

“There was growth in practically every sector of the economy, including health care, retail and manufacturing. Professional and business services added 51,000 jobs. The electronics and engineering giant Siemens has seen an increase in orders. Daryl Dulaney, president and CEO of Siemens Industry, says the company is actively recruiting employees, especially in skilled fields like engineering.” reported NPR’s Jim Zarroli.

Despite this upward employment trend, the Conference Board’s US Employment Trends April Index dipped 0.6 percent to 100.5. Down from March’s 101.1, this is the largest decline since April 2009. The index is currently up by 6 percent over a year ago however.

“While employment is growing at the fastest rate in years, the leading indicators for employment are decisively flashing yellow,” said Gad Levanon, associate director of macroeconomic research at The Conference Board. “In April, the employment trends index experienced the largest monthly decline in two years. It is unlikely that the current pace of job growth can be maintained in the months ahead.”

Recruiting remains positive according to many search firms. The Monster online-recruiting volume jumped 12 points to 145 in the month of April, and is touted as evidence of an improving labor market. Scot Melland, CEO of Dice Holdings, a provider of career Web sites said: “I expect continuation of the moderate employment growth we’ve seen in the last year, I’m not expecting a surge, [but] I’m not expecting it to die down.” 

There are currently almost 14 million unemployed workers (not including those who have dropped out of the workforce). So at the current job growth rate, it would take until the fall of 2016 to get back to the prerecession unemployment rate. 

See also:

The Right Talent Critical for Business Growth Strategy Implementation, Say Leading CEOs

The Unemployment Puzzle by Ezra Klein

Why the Unemployment Rate is About to Fall Hard

The Conference Board Employment Trends Index™ (ETI) Employment Trends Index Declines

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