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At the midway point of 2014, it is clear that the U.S. labor market has shaken off its winter slowdown. Preliminary data from the U.S. Bureau of Labor Statistics (BLS) show that on average, 231,000 jobs were created each month from February to May, compared with an average of 114,000 jobs in December 2013 and January 2014.
But even with that rebound, signs remain that an extended surge in hiring is not imminent. A new report by the BLS shows that the U.S. economy continues to do “more with less” as far as productivity is concerned, and that could negate higher demand for payroll growth.
The report, titled What Can Labor Productivity Tell Us about the U.S. Economy?, found that employees in the U.S. worked virtually the same number of hours in 2013 as they did in 1998—about 194 billion labor hours.
This means there was basically no growth in the number of hours worked, despite the fact that the U.S. population gained more than 40 million people during that time, and despite the fact that there were thousands of new businesses established during that period, according to the BLS.
Given this lack of growth in labor hours, the report says it is “perhaps even more striking” that American businesses still managed to produce 42 percent—or $3.5 trillion—more output in 2013 than they had in 1998, even after adjusting for inflation.
This can be attributed to a number of things, particularly businesses investing in faster technology, hiring higher-skilled workers and reducing waste. But the overall movement of “higher productivity” with little change to the number of hours worked suggests that many U.S. businesses, in addition to learning to do more with less, are perhaps less inclined to add staff to support their operations.
Notable Employment Projections
That aside, here are several projections for job growth in the coming months.
The National Association for Business Economics (NABE), in its June 2014 outlook, says its members’ sentiment regarding the labor market has “become more upbeat.” Nonfarm payrolls are expected to gain an average of 209,000 jobs for the remainder of 2014, up strongly from an expected average of 188,000 jobs in NABE’s March outlook. The nation’s unemployment rate is expected to fall to an average of 6.2 percent in 2014 and decline further to 5.9 percent in 2015, according to NABE.
At its June 2014 meeting, members of the Federal Reserve Board had varying opinions on the nation’s jobless rate for the remainder of 2014, ranging from 5.8 percent to 6.2 percent. Board members also predicted that the unemployment rate will range between 5.2 percent and 5.9 percent in 2015 and between 5.0 percent and 5.6 percent in 2016.
In its employment outlook survey for the third quarter of 2014, staffing services company ManpowerGroup said U.S. employers have a “net employment outlook” of 14 percent for the July-September timeframe; 22 percent of employers will increase staffing levels, 4 percent will decrease staffing, and 3 percent are unsure. A majority of respondents (71 percent) will keep staffing levels flat for the third quarter. The positive net of 14 percent marks the highest outlook since the second quarter of 2008, when 14 percent also was recorded. Globally, staffing levels are expected to increase in 37 of 42 countries and territories surveyed in the second half of 2014, Manpower reports.
Human capital services company CareerBuilder says job opportunities will improve for college graduates in 2014. More than half (57 percent) of employers surveyed say they plan to hire new college graduates in 2014, up slightly from 53 percent in 2013 but down substantially from 44 percent in 2010. The most sought-after majors noted by responding employers this year? Business (39 percent), computer and information sciences (28 percent), and engineering (18 percent).
Professional career services company Dice Holdings says improvements in the U.S. economy have sparked an increase in hiring plans for the second half of 2014. A majority of hiring managers and recruiters surveyed (56 percent) said they would increase staffing levels in the second half of the year. Only 11 percent of those surveyed said there was a likelihood of layoffs in the latter half of 2014—the lowest percentage recorded since Dice Holdings began its survey in 2008.
Joseph Coombs is a senior analyst for workforce trends at SHRM.
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