February 8, 2016 – Employers only added 151,000 jobs in January but the U.S. unemployment rate dropped to 4.9 percent, the lowest since February 2008, according to the most recent U.S. Bureau of Labor Statistics report.
Analysts had expected 190,000 jobs to be added during the month. Currently there are 7.8 million people unemployed in the U.S.
“Job growth remains strong despite the turmoil in the global economy and financial markets,” said Mark Zandi, chief economist at Moody’s Analytics. “Manufacturers and energy companies are reducing payrolls, but job gains across all other industries remain robust. The U.S. economy remains on track to return to full employment by mid-year.”
The financial markets are leery,” said Michael Hanson, a senior economist at Bank of America Merrill Lynch. “But the labor market still looks like it’s continuing to grow.”
Job gains occurred in several industries, led by retail trade, food services, healthcare and manufacturing. Employment declined in private educational services, transportation & warehousing and mining.
Here’s a closer look:
- Retail trade added 58,000 jobs in January, following essentially no change in December. Employment rose in general merchandise stores (+15,000), electronic and appliance stores (+9,000), motor vehicle and parts dealers (+8,000), and furniture and home furnishing store (+7,000). Employment in retail trade has increased by 301,000 over the past 12 months, with motor vehicle and parts dealers and general merchandise stores accounting for nearly half of the gain.
- Employment in food services rose in January (+47,000). Over the year, the industry has added 384,000.
- Healthcare continued to add jobs during the month (+37,000), with most of the increase occurring in hospitals (+24,000). Healthcare has gained 470,000 jobs over the past 12 months, with about two-fifths of the growth occurring in hospitals.
- Manufacturing added 29,000 jobs in January, following little employment change in 2015. Over the month, job gains occurred in food manufacturing (+11,000), fabricated metal products (+7,000), and furniture and related products (+3,000).
- Employment in financial activities sectors rose during the month (+18,000). Job gains occurred in credit intermediation and related activities (+7,000). Private educational services lost 39,000 jobs in January due to larger than normal seasonal layoffs.
- Employment in transportation and warehousing decreased by 20,000 during the month. Most of the losses occurred among couriers and messengers (-14,000), reflecting larger than usual layoffs following strong seasonal hiring in the prior two months.
- Employment in mining continued to slide in January (-7,000). Since reaching a peak in September 2014, employment in the industry has fallen by 146,000, or 17 percent.
- The professional and business sector was little changed in January (+9,000), after increasing by 60,000 in December. Within the industry, professional and technical services added 25,000 jobs over the month, in line with average monthly gains over the prior 12 months. Employment in temporary help services edged down in January (-25,000), after edging up by the same amount in December.
- Employment in other major industries, including construction, wholesale trade, and government, changed little over the month.
Looking ahead, U.S. employers remain confident in their hiring plans, with 36 percent of employers planning to add full-time, permanent employees in 2016, according to CareerBuilder’s annual job forecast. Nearly half of employers (47 percent) plan to hire temporary or contract workers.
Comparing industries, financial services (46 percent), information technology (44 percent), and healthcare (43 percent) are expected to outperform the national average for employers adding full-time staff. Manufacturing (37 percent) is expected to mirror the national average.
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Of the employers who plan to increase the number of full-time employees in the new year, the top areas they’ll be recruiting for include customer service (32 percent), information technology (29 percent), sales (27 percent), production (24 percent), administrative (20 percent), marketing (18 percent), business development (16 percent), human resources (16 percent), accounting/finance (15 percent), and engineering (13 percent).
CareerBuilder’s report is just the latest to reveal an upbeat job forecast. The recently released annual hiring survey by DHI Group found that 61 percent of HR managers and corporate recruiters anticipate more hiring in the first half of 2016 as compared to the second half of 2015. In the next six months, 17 percent of companies surveyed plan to hire 30 percent or more professionals, up five percentage points from the prior year.
According to the ‘2016 Hiring Outlook: Strategies for Adapting to a Candidate-Driven Market’ report released by The Execu | Search Group, 66 percent of employers plan to hire additional staff this year.
Despite these upbeat reports on companies expecting to hire this year, other recent reports say lack of talent, especially in the U.S., could thwart or at least tamp down hiring plans.
Just last week, Indeed’s ‘Labor Market Outlook 2016: Uncovering the Causes of Global Jobs Mismatch’ found that the U.S. leads 12 major markets in unfilled jobs, with more than 25 percent of jobs left open after 60 days.
The latest ‘Recruiter Nation Survey’ released by Jobvite found that 56 percent of recruiters cite the lack of available skilled talent as a key stumbling block in hiring. The report also found that 95 percent of recruiters anticipate equal or increased competition for talent in 2016.
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media