Bad job market news from several indicators, but unemployment down
CNN/Money reports: “A hiring shock; July payroll growth far shy of Wall Street forecasts; unemployment rate down to 5.5%”
The Labor Department report [released last week] showed only 32,000 new net jobs added to payrolls during the month, down from a revised 78,000 jobs that were added in June. The increase was the smallest since December, when payrolls rose by just 8,000.
The unemployment rate fell to 5.5 percent, an improvement from the 5.6 percent reading in June. . .
Measurement questions continue to plague analysts:
[T]he survey of households, used to compute the unemployment rate, showed 629,000 more people at work than in June. The other payroll number is based on a survey of employers. One economist said he believes this suggests problems with the employer survey.
A different measure also showing job market weakness is the privately-maintained Challenger, Gray & Christmas index of monthly job-cut announcements: “Job cut plans jump in July; Plans by U.S. firms to trim payrolls surge, as hiring plans fall, employment firm says.”
U.S. businesses announced 69,572 job cuts in July, up from 64,343 job cuts in June, a gain of 8 percent, according to Chicago-based Challenger, Gray & Christmas, which keeps track of monthly job-cut announcements.
July’s announcements were 18 percent lower than those of July 2003, when 85,117 cuts were announced.
The number of new hires announced fell 30 percent to 26,880 from 38,377 in June. There were 55,307 new jobs announced in May, the first month in which Challenger began tracking hiring figures.
The article gives reasons to question the accuracy of these figures. Read more
Finally, CNN/Money reports on another another interesting privately maintained index: “Monster sees fewer jobs on Web; Online ads down in July for first time this year, job generation still a problem for U.S. economy.”
The Monster Employment Index, which is based on figures collected from over 1,500 Web sites, edged lower in July to 134 from 136 in June, though it remains well above a reading of 102 at the start of 2004. Read more
Locally:
Every company I have spoken to has either finished a glut of hiring, or has big, big capital projects in the works.
On the other side, the number of individuals starting their own business has jumped up (anecdotally).
I think this is a matter of absorbing the new hires, and finding out whether they need more. Companies are still showing a lot of caution in their hiring decisions, but the churn experienced in IT is starting to affect their ability to continue dampening salaries and avoiding pay increases.
The biggest problem that St Louis companies face is finding good talent to bring over in a lateral salary move.
Thanks for the comment. Glad to have you aboard as a St. Louis reader.
I have speculated previously about new business starts (and independent contractors) as an explanation for the gap between the payroll survey (self-employed individuals won’t show up until they hire others as employees), and the better-performing household survey (these people may say they are indeed working).
Open question: are these new businesses supporting the new entrepreneurs, or just running them into debt?
Your comment about good talent brings me to a point I meant to get around to. People looking to change careers, or young people looking to find a direction for their education and training, need to pay attention to where the jobs are expected to be and what is least likely to go offshore.
However, it is equally important to go with your head, hands, and heart. If you have a high degree of talent and motivation in a given area, and are able to become superior in it, you’ll make it (and be happy), IMHO.