A hiring slowdown has continued with May employment figures about half of what was expected and the unemployment rate ticked up to 8.2 percent. As a job seeker, keeping abreast of how the economy is influencing the job market is important. How might these factors affect you? Let’s look at a couple of indicators.
Growth in economy
The economy has been tied to job growth for decades. If it doesn’t grow fast enough to support job growth, then the numbers go down. Typically jobs increase in the first quarter of the year. The economy is predicted to grow 2.5% this year. Job growth for March and April was down significantly with employers adding fewer than 100,000 jobs for those two months. Professional and business services, encompassing the while-collar jobs that lead to spending in the economy, fell by 1,000, construction sector shed 28,000 jobs, and leisure and hospitality fell by 9,000 jobs in May. With May reflecting weaker number of hires, economists fear that hiring won’t pick up until the economy picks up the pace.
Who isn’t concerned about the rising prices of gasoline these days? The expectation was that people would continue to pay higher and higher prices at the gas pump. However, what has transpired is that people are more prudent with their gas usage because of the squeeze on their budget. According to Joel Naroff, Chief Economist at Naroff Economic Advisors, “Consumers drive about 70% of U.S. economic activity, so their spending is crucial for economic and job growth.” Even with some gasoline prices being lowered in some states, this still is true.
Have you heard – salary isn’t keeping up with inflation. As companies cut back, salary is one area that gets hit. Earnings are not being adjusted for inflation at the same rates as they previously were. And, if a company is able to hire, the new employees are being hired at significantly lower salaries. The Bank of America economists say “the income trends are hardly a positive for consumer spending.”
The job market may not reflect strong numbers when it comes to measuring the unemployed getting back to work because millions have just given up looking. This skews the percentages. If you see the unemployment rate dropping significantly, one factor can be that people have taken themselves out of the workforce.
The United States is still recovering from the recession suffered a few years ago. About 8.8 million jobs were lost between January 2008 and February 2010 with only about 40% of those jobs being recovered. Heidi Shierholz, an economist with the Economic Policy Institute, calculates that, “accounting for population growth, the United States would have to create 350,000 jobs a month for three years to return to pre-recession employment levels. That’s nearly three times as many jobs as the economy generated last month.”
Job seekers need to take a hard look at these statistics and information. All of these factors will affect you either in the job you currently hold or in your job search. Keeping a keen eye on the economy is helpful to know where the next clues may be found for economic growth and a possible surge in hiring. When the economy is good, everyone knows where to find jobs. When the economy is in a state of flux as it is today, you need to have strategies in place to find those few jobs available at the top of the pyramid.
Louise Garver is an executive career coach and branding & job search strategist at Career Directions LLC . She provides executives with career management tools that get results. Dedicated to helping people discover their unique talents and find the work they love, Louise is a CEO’s trusted resource.
- Published Contributor to over 30 publications
- Achieved 20+ certifications & distinctions
- Active Member of eight career related associations
Additional details at Visual CV: http://www.visualcv.com/LouiseGarver