BLS Analysis for October 2013

Bob Marshall’s October 2013 BLS Analysis; 11/8/13

October BLS Preface

Veteran’s Day, November 11, 2013

It is important, before I start this month’s BLS Analysis for Recruiters, that we all pause and reflect on all of those veterans who, over the years, have served our country and kept us free.  I come from a military family.  My great, great grandfather served with Sherman’s Union Army during the Civil War.  My grandfather, who was career Navy, was at Pearl Harbor during the Japanese attack and served throughout WWII and beyond.  My father, who was on the same destroyer as my grandfather (that’s another story!) also served throughout WWII.  I served in Naval Intelligence for three years during the Vietnam War era.  My stepson served in the Army.  And my grandson is in the Army now serving in Afghanistan.  He has already been seriously wounded, recovered and is now back with his unit on his second deployment.  We pray each day that he makes it back, this time in one piece.

A few years ago, I received a letter from the Executive Officer, Cdr. A. A. Richards, USN (RET), who served aboard the destroyer, USS Trathen, with my grandfather and dad, during WWII.  To give you a sense of the conflicting emotions that our veterans feel, here is part of his letter:

“On the lighter side:  Your Dad was a great performer on the trumpet.  I remember one time when we went alongside of a troop transport somewhere around New Guinea.  Just before dark, your Dad put on a little concert for the troops.  If my old and faulty memory serves me correctly, he had perched on top of 5” mount #1.  Just before dark, when we had to go to the darken ship routine because we were in a combat zone, your Dad let go with a rousing bit of the Marine Corps song, “From the Halls of Montezuma to the shores of Tripoli”.  I guess the troops were Marines.  The blast of cheering, whooping and hollering was absolutely deafening and prolonged.”

“In April of 1945 we took a hit during a night air raid and lost 3 or our shipmates.  They were buried at sea the next day and your Dad played “Taps”, as the bodies were committed to the sea.  That was one of the most gut-wrenching, traumatic emotional experiences I have ever endured.  In my memory I can still recall the scene and those haunting notes from the trumpet and my own tears.”

So not only on Monday, but every day, remember our veterans in your heart!  Veterans everywhere just don’t want to be forgotten.  So ‘Thank You’ veterans, and active military, for your sacrifice and for your service!

TBMG News

Bob Marshall – Training/Coaching Updates

IPA National Convention 2014, Las Vegas, NV, April 3-4, 2014 :

I will be presenting at the Inter-City Personnel Associates (IPA) National Convention at Bally’s, Las Vegas, NV on April 3-4, 2014.  My topics will be determined at a later date.

COACHING**

**Now, if you are serious about increasing your billings, give my prized ‘$1,000,000 billing in one year’ student, David Thaler (502-531-9890), a call.  He will let you know what I did for him and what I can do for you to help you reach your maximum potential.  If you are ready to invest in yourself and to receive the info you need, to bill at high levels, I can give you that information.  Then it will be up to you to execute.  The ball is in your court.

Here are the details of my three coaching plans:

1. Coaching – Three Month Platinum Plan

This is a 3-month plan.  In this plan, I will put in place all of the tools that you will need to become a profitable recruiter.  My five major products (training manual, daily planner, QRG, forms and the ‘Classics’ audio series) are included in this selection.  We will have a meeting, up to one hour, once per week and I will be available to continually work with you and answer your questions on a weekly, 8am-5pm basis.  Admission into the Illuminati Think Tank series is included, with access to select past recordings.

1. Coaching – One Month Gold Plan

This is a month-to-month plan.  In this plan, I will be available to you for 4 separate meetings, up to one hour, to be parceled out as you choose, but must be used within a 4-5 week period.  Admission into the Illuminati Think Tank series is included.

1. Coaching – Hourly ‘A La Carte’ Silver Plan

This is an hourly ‘a la carte’ plan.  Once you have selected a date/time for our one hour meeting, (for coaching and/or training) and confirmed that date/time with me (and prepaid via PayPal), this plan goes into effect.  After the meeting, you are also entitled to follow-up emails during the next five days.

*All the details of my coaching plans, and products, are available to you on my website:  www.themarshallplan.org or you can reach me at 770-898-5550 or email me at:    bob@themarshallplan.org.

Preface

 Many of you continue to correspond with me about these monthly BLS analyses and have asked if it is OK to use them in your presentations.  The answer is, of course, yes!  That is why I spend the time to assemble this information.  I would encourage any of you who have that desire to weave any of the information I have printed below into your presentations.  I write these analyses for the benefit of our recruitment industry in general and for the members of my distribution list in particular.  So use this info as you deem appropriate.

I also write these monthly BLS analyses to not only counterbalance the negative/incorrect press reporting of our general economic state but, more than that, to remind all of my recruitment readers that, at the level we work, there is no unemployment and so we must recruit to find the candidates our client companies so desperately need!

So, to my recruiter colleagues, get out there and do what your name implies…RECRUIT!  When your client companies have unique and difficult positions to fill, they need you.  When they are being picky, they need you.  When they are longing for more production from fewer employees, they need you.  Go fill those needs.  These should be the halcyon days in the recruitment arena!

Finally, always remember that we are not in an HR business, but in a ‘circumventing the time factor in the hiring sequence’ business—and adding value to our client companies.

 

Skills gaps concerns 46% of U.S. execs, survey finds

Daily News, October 30, 2013

 U.S. executives at large companies confirm that a skills gap persists for their businesses, with 46% concerned that they won’t have the skills they need in the next 1-2 years, according a skills and employment trends survey released today by Accenture.  44% said they did have the skills needed for today and for the next 12 to 24 months.

51% of companies expect to increase investments in training over the next two years, and 35% of executives whose companies are facing a skills shortage reported that they have not invested enough in training in the past.

For those executives who have or are anticipating a skills shortage, the biggest demand is for IT skills at 44% and engineering at 36%.

Executives were asked the functions at their company in which they believe there is or may be a shortage of people with the required skills in the next 12 to 24 months. Responses include:

• Information technology: 44%
• Engineering: 36%
• Research and development: 29%
• Sales: 29%
• Manufacturing/production: 25%
• Marketing: 23%
• Risk and regulatory: 22%
• Human resources: 18%
• Legal: 15%
• Finance: 13%

The Accenture 2013 Skills and Employment Trends Survey: Perspectives on Training surveyed 400 executives at large US companies.

Small business Q4 hiring plans down, survey finds

Daily News, November 1, 2013

Small business owners will slow the rate of new hires and maintain current compensation levels in the 4^th quarter, according to a new business confidence survey released today by Insperity Inc., the largest professional employer organization in the U.S.

“Survey responses indicate that business owners are returning to more cautious management strategies to safely execute their short-term and long-term business plans,” said Insperity Chairman and CEO Paul Sarvadi. “Regardless of industry, businesses continue to balance the current challenging risk-reward ratio in creative ways to serve clients and grow profits.”

• 26% of respondents said they are adding employees in the 4^th quarter, down from 40% in last quarter’s survey
• 68% are maintaining current staffing levels, up from 56% in July and 63% last fall
• 5% are laying off employees, up from 4% last quarter but a decrease from 9% at this time last year

71% of respondents plan to pay their employees at their current rate, 17% plan to increase pay, 11% are unsure and 1% plan to cut pay.

The survey also found that, compared to this time last year, employee pay rose 2.9%, bonuses fell 11.7% and commissions increased 4.0%.

Insperity conducted the survey from October 8^th-10^th.  It included CEOs, CFOs and other executives in a variety of industries from its base of approximately 5,500 U.S. workforce optimization clients.

 What companies are, and aren’t, doing to find qualified workers

CNBC, Allison Linn, 11/7/13

It’s been a familiar lament over the past few years: The idea that even though millions of Americans are unemployed, companies across the country just can’t find enough qualified workers.

New data suggests that although many companies continue to complain about the so-called skills gap, only a minority of companies are taking steps to fix it.

The CareerBuilder survey of 1,648 U.S. hiring managers and human resources professionals, released Thursday, found that nearly eight in 10 managers are at least somewhat concerned about the skills gap, while just about 4 in 10 companies are doing anything to alleviate it.

The results come as the labor market continues to slowly add jobs, but unemployment remains high and millions are still out of work.

Experts say the weak job market has left many companies feeling like they can still demand a candidate who has a perfect record, plenty of relevant experience — and is willing to take a temporary job for relatively low pay.

“Sometimes we call that a purple squirrel,” said Jorge Perez , senior vice president in the North American division of the staffing firm Manpower.

Manpower’s own talent shortage survey, released earlier this year, found that 39% of U.S. employers are having trouble finding employees who have the right skills, a drop from 49% in 2012.

Although the latest figures show there is still a problem, Perez said the drop from 2012 shows that some employers have become more willing to accept that the purple squirrel may not exist. If they want the perfect candidate, they may need to do some training — either in-house or in partnership with others — and offer a good salary, full-time status and some benefits.

Matt Ferguson, CareerBuilder’s chief executive, said he also is starting to see a few signs that some companies are taking it upon themselves to build a more qualified, competitive workforce. Those efforts range from AT&T’s decision to participate in a much-hyped, experimental effort to offer a low-cost graduate degree in computer science to individual companies being more willing to hire a worker with some skills, and train them in others.

“I think they’re getting to the point where they have to,” said Ferguson, who is also one author of a new book on navigating the skills gap and creating a competitive workforce.

In general, companies appear to be working a little harder to find the best candidate, although not nearly as hard as they did when the job market was stronger.

Steven J. Davis, a management professor at the University of Chicago Booth School of Management, said his index of recruitment intensity — essentially, how hard employers are looking for the right workers — has only partially recovered since falling sharply amid the recession and financial crisis in 2008 and 2009.

He says employers don’t yet seem to be feeling a lot of pressure to hire any one candidate, because they see that so many people are still out of work.

“Employers know that if they don’t fill a job today and they really have a tremendous need, they can fill it in a month,” he said.

 

Skills mismatch?

CareerBuilder’s Ferguson said there are some legitimate concerns about a mismatch between the jobs that are available and the workers that are out there. He notes that the Great Recession led to millions of job cuts in fields like construction and manufacturing, and the advent of technology has reduced the need for some administrative workers. That’s presumably left some workers possessing skills that no one needs anymore.

Meanwhile, the push to keep down costs also has left some companies looking for one person with a multitude of skills — marketing, data analysis and information technology, for example.

Still, some experts say that the rampant complaints about unqualified workers in the aftermath of the recession are overblown. Paul Osterman, a management professor at MIT’s Sloan School of Management, recently completed a nationally representative survey of about 1,000 manufacturing firms.

He found that only about 25% of companies appeared to be having trouble finding workers, as measured by the company having a job vacancy for three months or more.

Those companies that were having trouble tending to be smaller and more innovative, he said, pointing to a legitimate concern that a minority of companies are in need of specialized skills that are hard to find.

“I’m not telling you there’s zero problem,” he said. “I’m telling you the level of hysteria is wrong.”

 

Blog:  The “True” Unemployment Rate Is the One BLS Releases Every Month*, But It’s Not the One “True” Measure of Labor Market Slack by Heidi Shierholz

October 10, 2013

“Yesterday we released a new monthly labor market indicator, an estimate of the number of “missing workers” (potential workers who are not working or looking for work because the job market is currently so weak). We also generated another new measure—what the unemployment rate would be if these missing workers were classified by the Bureau of Labor Statistics as actively looking for work. As of the latest data available, August 2013, there were nearly 5,000,000 missing workers. If these workers were actively looking for work, the unemployment rate would be 10.1%, not 7.3%.”

“Many have asked me if I think this augmented unemployment rate is the “true” or “real” unemployment rate, so I thought it’d be useful to clarify: The unemployment rate that BLS puts out is the true unemployment rate, and there are good reasons for the BLS to use the definitions it does. But the official unemployment rate is not currently the best measure of changes in the health of the labor market.”

“In other words, no, I don’t think my new measure is the “true” unemployment rate, but in today’s economy, I do think it’s a better measure than the unemployment rate for gauging trends in job opportunities and the overall health of the labor market.”

“Technically speaking, my measure is the unemployment rate plus the “participation gap” (the participation gap is the cyclical decline in the labor force participation rate, i.e. the decline in participation that is due to the weak labor market, not other trends like retiring baby boomers). In other words, unlike the unemployment rate, this measure accounts for a key component of slack in today’s labor market—the fact that many workers have dropped out of, or never entered, the labor force primarily because job opportunities are so weak. The unemployment rate misses this piece entirely because jobless workers are only counted as unemployed if they are actively seeking work. If policymakers or commentators want the best gauge of trends in the health of today’s labor market and how much productive slack exists in the economy, they should not be looking at the unemployment rate, they should be looking at this (or some other measure uninfected by cyclical changes in participation, like the employment to population ratio of prime-aged workers).”

 

Strong Headline Number Masks Underlying Weakness

Comment on Q3 GDP by Kathy Bostjancic, Director for Macroeconomic Analysis, The Conference Board

NEW YORK, Nov. 7, 2013 /PRNewswire/ — The U.S. Bureau of Economic Analysis today reported 2.8% annualized growth in real gross domestic product for the third quarter of 2013.

Economic growth in the third quarter was disappointing. To be sure, 2.8% growth looks strong. But the more fundamental and longer-term issue is consumers are still unable to release their pent-up demand since income gains remain so paltry. In fact, even with very weak industrial activity, there was a very large and unintended inventory build. The large stockpile built up in Q3, along with the government shutdown, will weigh down Q4 GDP growth. Moreover, uncertainty about near-term economic and job prospects (aggravated by the government shutdown), as confirmed by The Conference Board’s latest consumer confidence estimates, prevents consumers from replacing worn-out furniture and appliances. Meanwhile, business sits on new investment projects, unwilling to give them a green light unless final demand picks up. Finally, a relatively tepid global economy is limiting export opportunities.

The new ADP/Moody’s National Employment Report

Released, October 30, 2013

Private sector employment increased by 130,000 jobs from September to October, according to the October ADP National Employment Report®, which is produced by ADP®, a leading provider of human capital management solutions, in collaboration with Moody’s Analytics.  The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.  September’s job gains were revised down from 166,000 to 145,000.

By Company Size

Small businesses: 37,000

1-19 employees 35,000

20-49 employees 2,000

Medium businesses: 13,000

50-499 employees 13,000

Large businesses: 81,000

500-999 employees 2,000

1,000+ employees 79,000

By Sector

Goods producing 24,000

Service providing 107,000

Industry Snapshot

Construction 14,000

Manufacturing 5,000

Trade/transportation/utilities 40,000

Financial activities

Professional/business services 20,000

Goods-producing employment rose by 24,000 jobs in October, up from 16,000 in September.  Construction payrolls added 14,000 jobs, while manufacturing payrolls increased by 5,000.

Service-providing industries added 107,000 jobs in October, down from 130,000 in September.  Among the service industries reported, trade/transportation/utilities added the most jobs with 40,000 over the month.  Professional/business services employment rose by 20,000, while financial activities shed 5,000 jobs.

“According to ADP National Employment Report findings, the U.S. private sector added a total of 130,000 jobs during the month of October, well below the average of the last twelve months,” said Carlos A. Rodriguez, president and chief executive officer of ADP.  “Small business growth was down from the previous month, while payrolls among large enterprises showed an increase.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The government shutdown and debt limit brinksmanship hurt the already softening job market in October.  Average monthly growth has fallen below 150,000.  Any further weakening would signal rising unemployment.  The weaker job growth is evident across most industries and company sizes.”

(The November 2013 ADP National Employment Report will be released at 8:15 a.m. ET on December 4, 2013).

Due to the important contribution that small businesses make to economic growth, employment data that are specific to businesses with 49 or fewer employees is reported monthly in theADP Small Business Report®, a subset of the ADP National Employment Report.

September 2013 Small Business Report Highlights

Total Small Business Employment:             37,000

●By Size
►1-19 employees	35,000
►20-49 employees	2,000
●By Sector for 1-49 Employees
►Goods Producing	10,000
►Service Producing	26,000
●By Sector for 1-19 Employees
►Goods Producing	6,000
►Service Producing	29,000
●By Sector for 20-49 Employees
►Goods Producing	4,000
►Service Producing

Bottom-line:  To my audience of recruiters, always remember this:  Our ‘bread and butter’, especially on the contingency side of the house, has historically been, and continues to be, small and medium-sized client companies.  Along with the large companies, these companies need to be in included in your niche!

Job Openings and Structural Unemployment

On October 24^th, the BLS reported that there were 3,900,000 job openings on the last business day of August, up by 200,000 from July.  (The Job Openings and Labor Turnover Survey results for September 2013 are scheduled to be released on Tuesday, November 8^th, 2013).  The 3,900,000 reflects published openings comprised of jobs that are advertised either online or in print format.

The hires rate (3.3%) and separations rate (3.2%) also were little changed in August. This release includes estimates of the number and rate of job openings, hires, and separations for the nonfarm sector by industry and by geographic region.

As we recruiters know, that 3,900,000 number only represents 20% of the jobs currently available in the marketplace.  The other 80% of job openings are unpublished and are filled through networking or word of mouth or by using a RECRUITER.   So, those 3,900,000 published job openings now become a total of 19,500,000 published and hidden job orders.

In October there were 11,272,000 unemployed workers.  What was the main reason why those workers were unemployed?  Two Words:  Structural Unemployment.  If we can’t figure out how to educate and/or reeducate those 11,272,000 unemployed, then they will keep reappearing each month as a BLS unemployment statistic—as they have.  In the meantime, our recruitment marketplace flourishes!

Online Labor Demand Down 257,000 in October

October 30, 2013

• Labor demand in the first 10 months of 2013 has been flat
• October’s drop negated the large September gain of 209,000
• October losses posted in 49 of the 50 States with modest gain in South Carolina
• 21 of the 22 broad occupation categories were down in October

Online advertised vacancies were down 257,900 in October to 4,926,800, according to The Conference Board Help Wanted OnLine® (HWOL) Data Series. The September Supply/Demand rate stands at 2.2 unemployed for each vacancy, with a total of 6,100,000 more unemployed workers than the number of advertised vacancies.

“Slow overall economic growth has left labor demand flat in the first 10 months of 2013,” said June Shelp, Vice President of The Conference Board. “Even though the labor demand level still hovers around 5,000,000/month, the October loss leaves the 2013 year-to-date basically flat. This continues the trend we’ve seen this year with gains in one month being offset by declines the next month.”

Since October 2012, the most striking pattern is that most of the Professional occupations have seen losses while the Production/Service jobs have continued with modest gains. Over the year, higher-wage Professional occupations like Computer & Math jobs (-32,000) and Healthcare professionals (-29,000) lost job demand while lower-wage Production/Service jobs like Transportation (+54,000), Sales (+36,000), and Food service (+33,000) have posted gains.

(The November 2013 Conference Board Help Wanted OnLine®(HWOL) Data Serieswill be released at 10:00 a.m. ET on December 4, 2013). 

The October BLS Analysis

 The unemployment rate is published by the Bureau of Labor Statistics, a division of the US Department of Labor.  The rate is found by dividing the number of unemployed by the total civilian labor force.  On November 8^th, 2013, the BLS published the most recent unemployment rate for October, 2013 of 7.3% (actually it is 7.280, up .045% from 7.235% in September, 2013).

The unemployment rate was determined by dividing the unemployed of 11,272,000 (—up from the month before by 17,000—since October, 2012 this number hasdecreased by 976,000) by the total civilian labor force of 154,839,000 (down by 720,000 from September, 2013).  Since October 2012, our total civilian labor force has decreased by 737,000 workers.

 (The continuing ‘Strange BLS Math’ saga):  The BLS continues to increase the total Civilian Working Population—this time up to 246,381,000.  In one year’s time this population has increased by 2,398,000.  This is an increase of 213,000 from last month’s increase.  The Civilian Working Population has increased each month…

 

 

And this month the BLS has decreased the Civilian Labor Force to 154,839,000 (down from September by 720,000).

 

Subtract the second number (‘civilian labor force’) from the first number (‘civilian working population’) and you get 91,542,000 (not 91,541,000) ‘Not in Labor Force’.  That is an increase of 933,000 ‘Not in Labor Force’ in one month’s time!  Since October, 2012, 3,134,000 US workers have vanished!  Where did those 3,134,000 potential workers disappear to in one year’s time?  I am assuming they still have to eat and pay their rent.  They still need money, don’t they?  The government tells us that these NILFs got discouraged and just gave up looking for a job.  My monthly recurring question is:  “If that is the case, how do they live when they don’t earn any money because they don’t have a job???”

 Our Employment Participation Rate—the population 16 years and older working or seeking work—fell .4% to a new low of 62.8%.  This is the lowest Employment Participation Rate recorded since March 1978…when our president was Jimmy Carter, 35 years ago!  One year ago, our Participation Rate in August was 63.8%.

 Final take on these numbers:  Fewer people looking for work will always bring down the unemployment rate.

 Anyway, back to the point I am trying to make.  On the surface, these new unemployment rates are scary, but let’s look a little deeper and consider some other numbers.

The unemployment rate includes all types of workers—construction workers, government workers, etc.  We recruiters, on the other hand, mainly place management, professional and related types of workers.  That unemployment rate in October was 3.4% (this rate fell .1% from last month’s 3.5%).  Or, you can look at it another way.  We usually place people who have college degrees.  That unemployment rate in October was 3.8% (this rate rose .1% from last month’s 3.7%).

Now stay with me a little longer.  This gets better.  It’s important to understand (and none of the pundits mention this) that the unemployment rate, for many reasons, will never be 0%, no matter how good the economy is.  Without boring you any more than I have already, let me add here that Milton Friedman (the renowned Nobel Prize-winning economist), is famous for the theory of the “natural rate of unemployment” (or the term he preferred, NAIRU, which is the acronym for Non-Accelerating Inflation Rate of Unemployment).  Basically, this theory states that full employment presupposes an ‘unavoidable and acceptable’ unemployment rate of somewhere between 4-6% with it.  Economists often settle on 5%, although the “New Normal Unemployment Rate” has been suggested to fall at 6.7%.

Nevertheless (if you will allow me to apply a ‘macro’ concept to a ‘micro’ issue), if this rate is applied to our main category of Management, Professional and Related types of potential recruits, and/or our other main category of College-Degreed potential recruits, we are below the 4-6% threshold for full employment…we find no unemployment!  None!  Zilch!

 

THE IMPORTANCE OF GDP

“The economic goal of any nation, as of any individual, is to get the greatest results with the least effort.  The whole economic progress of mankind has consisted in getting more production with the same labor…Translated into national terms, this first principle means that our real objective is to maximize production.  In doing this, full employment—that is, the absence of involuntary idleness—becomes a necessary by-product.  But production is the end, employment merely the means.  We cannot continuously have the fullest production without full employment.  But we can very easily have full employment without full production.”

–Economics in One Lesson, by Henry Hazlitt, Chapter X, “The Fetish of Full Employment”

 On November 7^th, the Bureau of Economic Analysis announced the third-quarter, “advance” estimate, of our real gross domestic product (GDP) — the output of goods and services produced by labor and property located in the United States.  GDP increased at an annual rate of 2.8% in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the “advance” estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP increased 1.1% (revised), down from 1.8% in the second estimate.  In the second quarter, real GDP increased 2.5%.

The Bureau emphasized that the third-quarter advance estimate is based on source data that are incomplete or subject to further revision by the source agency.  The “second” estimate for the third quarter, based on more complete data, will be released on December 5, 2013.

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending.  Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP growth in the third quarter primarily reflected a deceleration in imports and accelerations in private inventory investment and in state and local government spending that were partly offset by decelerations in exports, in nonresidential fixed investment, and in PCE.

The economy needs to expand at about 3% just to keep the unemployment rate from rising.  Two consecutive quarters of a falling GDP indicate Recession.

IT IS IMPOSSIBLE FOR UNEMPLOYMENT EVER TO BE ZERO

‘Unemployment’ is an emotional ‘trigger’ word…a ‘third rail’, if you will.  It conjures up negative thoughts.  But it is important to realize that, while we want everyone who wants a job to have the opportunity to work, unemployment can never be zero and, in fact, can be disruptive to an economy if it gets too close to zero.  Very low unemployment can actually hurt the economy by creating an upward pressure on wages which invariably leads to higher production costs and prices.  This can lead to inflation.  The lowest the unemployment rate has been in the US was 2.5%.  That was in May and June 1953 when the economy overheated due to the Korean War.  When this bubble burst, it kicked off the Recession of 1953.  A healthy economy will always include some percentage of unemployment.

There are five main sources of unemployment:

1. Cyclical (or demand-deficient) unemployment – This type of unemployment fluctuates with the business cycle.  It rises during a recession and falls during the subsequent recovery.  Workers who are most affected by this type of unemployment are laid off during a recession when production volumes fall and companies use lay-offs as the easiest way to reduce costs.  These workers are usually rehired, some months later, when the economy improves.

1. Frictional unemployment – This comes from the normal turnover in the labor force.  This is where new workers are entering the workforce and older workers are retiring and leaving vacancies to be filled by the new workers or those re-entering the workforce.  This category includes workers who are between jobs.

1. Structural unemployment – This happens when the skills possessed by the unemployed worker don’t match the requirements of the opening—whether those be in characteristics and skills or in location.  This can come from new technology or foreign competition (e.g., foreign outsourcing).  This type of unemployment usually lasts longer than frictional unemployment because retraining, and sometimes relocation, is involved.  Occasionally jobs in this category can just disappear overseas.

1. Seasonal unemployment – This happens when the workforce is affected by the climate or time of year.  Construction workers and agricultural workers aren’t needed as much during the winter season because of the inclement weather.  On the other hand, retail workers experience an increase in hiring shortly before, and during, the holiday season, but can be laid off shortly thereafter.

1. Surplus unemployment – This is caused by minimum wage laws and unions.  When wages are set at a higher level, unemployment can often result.  Why?  To keep within the same payroll budget, the company must let go of some workers to pay the remaining workers a higher salary.

Other factors influencing the unemployment rate:

1. Length of unemployment – Some studies indicate that an important factor influencing a workers decision to accept a new job is directly related to the length of the unemployment benefit they are receiving.  Just recently the government re-extended the eligibility for unemployment benefits from 26 weeks to as much as 73 weeks.  Studies suggest that this reduces the incentive of the unemployed to seek and accept less desirable jobs.

1. Changes in GDP – Since hiring workers takes time, the improvement in the unemployment rate usually lags behind the improvement in the GDP.

WHERE RECRUITERS PLACE

Now back to the issue at hand, namely the recruiting, and placing, of professionals and those with college degrees.

If you take a look at the past few years of unemployment in the October “management, professional and related” types of worker category, you will find the following rates:

October 2012              3.8%

October 2011              4.4%

October 2010              4.5%

October 2009              4.7%

October 2008              3.0%

October 2007              2.0%

October 2006              1.9%

October 2005              2.2%

October 2004              2.4%

October 2003              2.9%

October 2002              2.8%

 

Here are the rates, during those same time periods, for “college-degreed” workers:

 

October 2012              3.8%

October 2011              4.4%

October 2010              4.7%

October 2009              4.7%

October 2008              3.1%

October 2007              2.1%

October 2006              1.9%

October 2005              2.3%

October 2004              2.5%

October 2003              3.1%

October 2002              3.0%

So, while October’s 2013 rates for these two categories, 3.4% and 3.8%, respectively, are trending positively, when looking at the big picture, it’s not anything to be very happy about either—especially when we see how well we had it during the 2002-2008 time frame.  But regardless, these unemployment numbers usually include a good number of job hoppers, job shoppers and rejects.  We, on the other hand, are engaged by our client companies to find those candidates who are happy, well-appreciated, making good money and currently working and we entice them to move for even better opportunities—especially where new technologies are expanding.  This will never change.  And that is why, no matter the unemployment rate, we still need to market to find the best job orders and we still need to recruit to find the best candidates.

Below are the numbers for the over 25 year olds

Less that H.S. diploma – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
7.7%	7.4%	8.2%	7.9%	8.4%	8.9%	8.6%	9.7%	9.8%	10.4%	10.6%	10.9%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
12.0%	12.6%	13.3%	14.8%	15.5%	15.5%	15.4%	15.6%	15.0%	15.5%	15.0%	15.3%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
15.2%	15.6%	14.5%	14.7%	15.0%	14.1%	13.8%	14.0%	15.4%	15.3%	15.7%	15.3%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
14.2%	13.9%	13.7%	14.6%	14.7%	14.3%	15.0%	14.3%	14.0%	13.8%	13.2%	13.8%

 

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
13.1%	12.9%	12.6%	12.5%	13.0%	12.6%	12.7%	12.0%	11.3%	12.2%	12.2%	11.7%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
12.0%	11.2%	11.1%	11.6%	11.1%	10.7%	11.0%	11.3%	10.3%	10.9%

 

H.S. Grad; no college – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
4.6%	4.7%	5.1%	5.0%	5.2%	5.2%	5.3%	5.8%	6.3%	6.5%	6.9%	7.7%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
8.1%	8.3%	9.0%	9.3%	10.0%	9.8%	9.4%	9.7%	10.8%	11.2%	10.4%	10.5%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
10.1%	10.5%	10.8%	10.6%	10.9%	10.8%	10.1%	10.3%	10.0%	10.1%	10.0%	9.8%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
9.4%	9.5%	9.5%	9.7%	9.5%	10.0%	9.3%	9.6%	9.7%	9.6%	8.8%	8.7%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
8.4%	8.3%	8.0%	7.9%	8.1%	8.4%	8.7%	8.8%	8.7%	8.4%	8.1%	8.0%

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
8.1%	7.9%	7.6%	7.4%	7.4%	7.6%	7.6%	7.6%	7.6%	7.3%

 

Some College; or AA/AS – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
3.7%	3.8%	3.9%	4.0%	4.3%	4.4%	4.6%	5.0%	5.1%	5.3%	5.5%	5.6%

 

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
6.2%	7.0%	7.2%	7.4%	7.7%	8.0%	7.9%	8.2%	8.5%	9.0%	9.0%	9.0%

 

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
8.5%	8.0%	8.2%	8.3%	8.3%	8.2%	8.3%	8.7%	9.1%	8.5%	8.7%	8.1%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
8.0%	7.8%	7.4%	7.5%	8.0%	8.4%	8.3%	8.2%	8.4%	8.3%	7.6%	7.7%

 

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
7.2%	7.3%	7.5%	7.6%	7.9%	7.5%	7.1%	6.6%	6.5%	6.9%	6.6%	6.9%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
7.0%	6.7%	6.4%	6.4%	6.5%	6.4%	6.0%	6.1%	6.0%	6.3%

 

BS/BS + – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.1%	2.1%	2.1%	2.1%	2.3%	2.4%	2.5%	2.7%	2.6%	3.1%	3.2%	3.7%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
3.8%	4.1%	4.3%	4.4%	4.8%	4.7%	4.7%	4.7%	4.9%	4.7%	4.9%	5.0%

 

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
4.9%	5.0%	4.9%	4.9%	4.7%	4.4%	4.5%	4.6%	4.4%	4.7%	5.1%	4.8%

 

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
4.2%	4.3%	4.4%	4.5%	4.5%	4.4%	4.3%	4.3%	4.2%	4.4%	4.4%	4.1%

 

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.2%	4.2%	4.2%	4.0%	3.9%	4.1%	4.1%	4.1%	4.1%	3.8%	3.8%	3.9%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
3.7%	3.8%	3.8%	3.9%	3.8%	3.9%	3.8%	3.5%	3.7%	3.8%

 

Management, Professional & Related – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.2%	2.2%	2.1%	2.0%	2.6%	2.7%	2.9%	3.3%	2.8%	3.0%	3.2%	3.3%

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
4.1%	3.9%	4.2%	4.0%	4.6%	5.0%	5.5%	5.4%	5.2%	4.7%	4.6%	4.6%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
5.0%	4.8%	4.7%	4.5%	4.5%	4.9%	5.0%	5.1%	4.4%	4.5%	4.7%	4.6%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
4.7%	4.4%	4.3%	4.0%	4.4%	4.7%	5.0%	4.9%	4.4%	4.4%	4.2%	4.2%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.3%	4.2%	4.2%	3.7%	4.0%	4.4%	4.8%	4.5%	3.9%	3.8%	3.6%	3.9%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
3.9%	3.8%	3.6%	3.5%	3.5%	4.2%	4.1%	3.8%	3.5%	3.4%

 

Or employed…(,000)

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
52,165	52,498	52,681	52,819	52,544	52,735	52,655	52,626	53,104	53,485	53,274	52,548

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
52,358	52,196	52,345	52,597	52,256	51,776	51,810	51,724	52,186	52,981	52,263	52,131

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
52,159	52,324	52,163	52,355	51,839	51,414	50,974	50,879	51,757	51,818	52,263	51,704

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
51,866	52,557	53,243	53,216	52,778	52,120	51,662	51,997	52,665	52,864	52,787	52,808

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
53,152	53,208	53,771	54,055	54,156	53,846	53,165	53,696	54,655	55,223	54,951	54,635

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
54,214	54,563	54,721	54,767	54,740	54,323	54,064	54,515	55,013	55,155

 

And unemployed…(,000)

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
1,164	1,159	1,121	1,088	1,407	1,478	1,585	1,779	1,539	1,647	1,786	1,802

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
2,238	2,137	2,292	2,164	2,373	2,720	3,034	2,925	2,859	2,593	2,530	2,509

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
2,762	2,637	2,600	2,464	2,450	2,644	2,687	2,762	2,381	2,417	2,525	2,468

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
2,557	2,435	2,381	2,196	2,419	2,598	2,742	2,671	2,450	2,410	2,336	2,303

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
2,410	2,336	2,330	2,062	2,275	2,472	2,666	2,556	2,245	2,170	2,077	2,221

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
2,211	2,164	2,020	1,980	1,990	2,358	2,286	2,130	1,978	1,930

 

For a total Management, Professional & Related workforce of…(,000)

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
53,329	53,657	53,802	53,907	53,951	54,213	54,240	54,405	54,643	55,132	55,060	54,350

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
54,596	54,333	54,637	54,761	54,629	54,496	54,844	54,649	55,045	55,574	54,793	54,640

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
54,921	54,961	54,763	54,819	54,289	54,058	53,661	53,641	54,138	54,235	54,788	54,172

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
54,423	54,992	55,624	55,412	55,197	54,718	54,404	54,668	55,115	55,274	55,123	55,111

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
55,562	55,544	56,101	56,117	56,431	56,318	55,831	56,252	56,900	57,393	57,028	56,856

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
56,425	56,727	56,741	56,747	56,730	56,681	56,350	56,645	56,991	57,085

 

Management, Business and Financial Operations – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.3%	2.3%	2.2%	2.1%	2.7%	2.5%	2.6%	2.8%	2.8%	3.0%	3.6%	3.9%

 

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
4.6%	4.5%	4.5%	4.4%	4.6%	4.8%	4.9%	5.0%	5.2%	5.4%	5.4%	5.2%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
5.2%	5.1%	5.4%	5.1%	4.9%	4.8%	4.7%	4.9%	4.3%	5.0%	5.5%	5.7%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
5.3%	4.9%	4.8%	4.6%	4.9%	4.6%	4.6%	4.6%	4.6%	4.7%	4.6%	4.4%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.5%	4.4%	4.4%	4.0%	4.1%	3.8%	3.8%	3.7%	3.5%	3.6%	3.8%	4.1%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
4.0%	3.9%	3.5%	3.5%	3.8%	3.5%	3.1%	3.4%	3.3%	3.7%

 

Professional & Related – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
2.1%	2.1%	2.0%	2.0%	2.5%	2.9%	3.2%	3.6%	2.8%	3.0%	3.0%	2.9%

 

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
4.9%	4.6%	4.3%	4.1%	4.3%	5.0%	5.2%	5.3%	4.4%	4.1%	4.1%	3.8%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
4.3%	4.1%	3.9%	3.5%	4.0%	4.9%	5.3%	5.1%	4.4%	4.1%	4.0%	4.0%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
4.2%	4.1%	4.0%	3.5%	4.0%	4.8%	5.5%	5.2%	4.3%	3.9%	3.5%	3.8%

 

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
3.8%	3.8%	3.6%	3.4%	3.3%	4.6%	4.7%	4.0%	3.6%	3.1%

 

Sales & Related – Unemployment Rate

 

1/08	2/08	3/08	4/08	5/08	6/08	7/08	8/08	9/08	10/08	11/08	12/08
5.2%	5.2%	4.8%	4.3%	5.1%	5.6%	6.2%	6.3%	5.7%	6.1%	6.5%	7.0%

 

1/09	2/09	3/09	4/09	5/09	6/09	7/09	8/09	9/09	10/09	11/09	12/09
7.7%	8.4%	8.9%	8.6%	8.9%	9.1%	8.3%	8.7%	8.9%	9.5%	9.1%	8.9%

1/10	2/10	3/10	4/10	5/10	6/10	7/10	8/10	9/10	10/10	11/10	12/10
10.1%	10.2%	9.7%	9.2%	9.6%	9.4%	10.1%	9.0%	9.4%	9.1%	8.8%	8.3%

1/11	2/11	3/11	4/11	5/11	6/11	7/11	8/11	9/11	10/11	11/11	12/11
9.3%	9.0%	8.5%	8.5%	9.4%	9.7%	9.4%	8.6%	9.4%	8.2%	7.8%	7.7%

1/12	2/12	3/12	4/12	5/12	6/12	7/12	8/12	9/12	10/12	11/12	12/12
8.2%	7.9%	8.1%	7.6%	7.9%	8.4%	8.3%	8.6%	7.9%	7.0%	7.3%	7.0%

1/13	2/13	3/13	4/13	5/13	6/13	7/13	8/13	9/13	10/13	11/13	12/13
8.5%	8.2%	7.7%	6.9%	7.1%	6.7%	6.9%	7.2%	7.5%	7.3%