Job Market Analysts Left Eating Crow | DCR Workforce Blog

Job Market Analysts Left Eating Crow

Non-farm employement1There is no denying the fact! The job market has dealt a really rude shock to every one of us. Everyone looked at the growth in manufacturing, exports and GDP and at how the housing sector was regaining lost ground. The economic data coupled with the drop in layoffs and the growing numbers of retail workers ahead of the holiday season added to the positive expectations. All the optimistic predictions of economic recovery and consumer confidence have taken a rather hard knock with the steep fall in the expected employment numbers for December – from 196000 to 74000!

This is as unexpected as it is demoralizing. Its impact goes beyond the job market to affect investments into the economy itself. . So, what could have caused this reversal in the fortunes of the job market?

  • Let us reject the numbers outright: The numbers are preliminary and may be revised as more information comes in. The same report also says a surprising 347000 persons of the 1.3 million long-term unemployed have stopped looking for jobs, bringing the unemployment rate to a 5 year low at 6.7%.
  • Blame it on the policy makers: All recovery efforts by the Federal Reserve aimed at bringing back an era of full employment have been hamstrung by budget cuts and tight fiscal policies, resulting in a set-back in the recovery, with the government itself shedding some of the jobs.
  • The weather did us in: The severity of the cold, which was unexpected and unbearable. Weather-related road closures and power outages affected many industries and businesses.
  • Some sectors performed badly: Overall, hiring has slowed down with significant job losses in many sectors like healthcare, transportation, shipping, warehousing and government.  Construction job losses were due to the extreme weather conditions.
  • The mismanagement of managers: Talent/experience mismatches or pay grade mismatches are making it hard for existing talent to find suitable jobs. Most companies report that they are looking for particular skills at a specific pay grade and are worried about hiring anyone with more credentials than required. A recent CareerBuilder survey which reported that 21% of employees are planning to change jobs in 2014 brings home to employers that they had better not hire someone who would just leave for something bigger and better. As a result, many jobs are lying unfilled while unemployment continues unabated.

So, if the weather improves in January, we may still hope to see a revision, indicating that the job market is enjoying a more robust health than what is portrayed by the December jobs report. But, to bring unemployment down to pre-recession levels, the economy has to keep on adding jobs at 200000 a month for the next 5 years or so. Let us have a show of hands on how many think of it as feasible?


Disclaimer:
The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.