Unemployment Rate Remains at 50 Year Low

Here’s the latest jobs report, with Bob Lopes, president of Randstad Sourceright in North America, weighing in. Only 75,000 jobs were created in May – is this a warning sign for a slowing economy?

June 7, 2019 – Employers added just 75,000 jobs last month as the U.S. unemployment rate remained at 3.6 percent, according to the most recent U.S. Bureau of Labor Statistics report released this morning. Economists had estimated that 175,000 jobs were to be added last month, according to a Bloomberg survey.

“There’s increasing evidence that the ongoing trade war here is beginning to have some tangible effects on the U.S. economy,” said Tim Quinlan, a senior economist at Wells Fargo Securities. “We’re not on the edge of the cliff here. But the pace of expansion in (manufacturing) is the slowest of the Trump era.”

“The question moving forward is whether or not slowing growth in the goods sector could pull down the services sector,” said Martha Gimbel, director of economic research at Indeed Hiring Lab. “Goods industries in general are more sensitive to trade wars, commodity prices and other unpredictable factors.”

Where Job Growth Occurred

  • Employment in professional and business services continued to trend up over the month (+33,000) and has increased by 498,000 over the past 12 months.
  • Employment in healthcare continued its upward trend in May (+16,000). The industry has added 391,000 jobs over the past 12 months.
  • Construction employment changed little in May (+4,000), following an increase of 30,000 in April. The industry has added 215,000 jobs over the past 12 months.
  • Employment showed little change in May in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government.

Top 5 Reasons Why the Job Market will Flourish in 2019
Many observers say that the pace of growth, with an average of more than 200,000 jobs created each month, is unsustainable. Some are even predicting a recession before 2020. But that is far from inevitable, according to a new report by ZipRecruiter, authored by labor economist Julia Pollack.

“While some industries slowed their rate of hiring in May due to uncertainty over international tariffs, or an inability to find qualified workers, other sectors such as high-tech and life sciences continued to experience healthy job growth,” said Bob Lopes, president of Randstad Sourceright in North America.

“Employers that may be hesitant to hire full-time workers have maintained, and even increased, revenue by onboarding temporary workers. Incorporating part-time or contract workers can help businesses endure market fluctuations and remain more agile in regards to human capital as business needs change,” he said.

Hiring Plans to Continue

U.S. employers were expecting hiring to pick up in coming months, with 24 percent of employers planning to add staff, according to the latest “Employment Outlook Survey,” released by ManpowerGroup. Employers in all U.S. regions and industry sectors are looking for headcount to grow. This is the seventh consecutive year of double-digit hiring outlooks in the U.S., according to the survey of more than 11,500 U.S. employers. But will those prospects now dim?

Related: The Global Recruiting Sector is in Growth Mode, But Challenges Loom

“As U.S. employers continue to report double-digit hiring outlooks, demand for talent is growing across the board from cybersecurity experts and data analysts to delivery drivers needed to keep up with 24/7 online retail,” said Becky Frankiewicz, president of ManpowerGroup North America. “It’s a skilled worker’s market. The best employers are reviewing the difference between what is desired in a role and what is required for a job. In the tech sector, we see a higher number of Java openings requiring computer science degrees than there are graduates.”

The most successful employers are re-evaluating the precise experience and education required to get the job done, she added, “and as a result they’re attracting the best, and often more diverse, talent to the organization,” Ms. Frankiewicz said.

Looking further ahead, economists foresee ongoing economic expansion for at least the next 12 months and companies expect to continue hiring, according to a business conditions survey released by the National Association for Business Economics (NABE). All survey respondents said that they expect the U.S. economy, as measured by the change in inflation-adjusted gross domestic product (real GDP), to increase over the next four quarters.

Related: Nearly Half of Employers Plan to Ramp Up Hiring

The Net Rising Index (NRI) for wages and salaries remains strong. Last month’s reading of 57 is just a notch below January’s all-time high NRI of 58. Wage increases are likely to become less prevalent among respondents’ firms, but are expected to remain solid; the forward-looking NRI for expected wage costs decreased from 74 to a still strong 59.

Employers Look to Continue Hiring Plans
U.S. businesses report strong hiring intentions, according to the latest “Employment Outlook Survey” by ManpowerGroup. Let’s go inside the latest forecast and see which sectors and regions are in growth mode. Search expert Todd Bennett then weighs in.

“The results of the survey indicates that all respondents still expect the economic expansion to continue within the next 12 months,” said NABE business conditions survey chair Sam Kyei, chief economist of SAK Economics LLC. “However, barely half of the panelists foresees growth in real gross domestic product to expand by more than two percent compared to two-thirds of respondents who expressed that view in the January 2019 survey.”

A separate report from Express Employment Professionals found that 80 percent of respondents said they planned to hire during the current quarter. Forty-one percent said the employment market is “trending up,” indicating that hiring might still pick up further in some parts of the country.

Almost half, 49 percent, said the employment market is “staying the same.” Just 11 percent said their market is “trending down.” In a previous Express survey, 53 percent said “staying the same,” 38 percent said “trending up,” and nine percent said “trending down.”

“The pace of hiring varies significantly by region, but the fact that hiring continues and so few businesses say their markets are ‘trending down’ is more encouraging news for the economy,” said Bill Stoller, CEO of Express Employment Professionals. “It’s worth asking, how much stronger would our economy be if we could fill the 7.6 million jobs that were open at last count?”

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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