The July labor report follows a number of surveys outlining moderate hiring plans from employers throughout the U.S.
US unemployment rate remained unchanged at 4.9 percent as employers added 255,000 jobs in July, according to the most recent U.S. Bureau of Labor Statistics report. The number of workers unemployed was essentially unchanged at 7.8 million. This report follows the addition of 287,000 jobs added in June.
Chris Rupkey, chief financial economist at MUFG Union Bank stated, “The economy continues to power forward despite the uncertainty and geopolitical risks out there in the world. The economy is moving forwards, not backwards.”
Growth Sectors Include
July’s job growth occurred in the following business sectors. The mining sector continued to lose jobs.
• PROFESSIONAL AND BUSINESS SERVICES added 70,000 jobs in July and has added 550,000 jobs the past 12 months. Within the sector, employment rose by 37,000 in professional and technical services in July, led by computer systems design and related services (+8,000) and architectural and engineering services (+7,000). Employment in management and technical consulting services continued to trend up (+6,000);
• HEALTHCARE employment increased by 43,000, with significant increases in ambulatory healthcare services (+19,000), hospitals (+17,000), and nursing and residential care facilities (+7,000). Healthcare has added 477,000 jobs over the past 12 months;
• Employment within FINANCIAL RELATED ACTIVITIES rose by 18,000 during the month and has risen by just 16,000 over the year;
• Employment in LEISURE AND HOSPITALITY continued to trend up in July (+45,000) while jobs in food services changed little in July (+21,000). This sector has added an average of 18,000 jobs per month through July 31st, compared with an average monthly gain of 30,000 in 2015;
• GOVERNMENT EMPLOYMENT increased in July (+38,000);
• The MINING sector continued to trend down month over month (-6,000). Mining reached a peak in September 2014 and since then employment in mining has decreased by 220,000, or 26 percent;
• Employment in other major sectors, including construction, manufacturing, wholesale trade, and information technology showed little or no change over the month.
The July labor report follows a number of surveys outlining moderate hiring plans from employers throughout the U.S. Per the latest Manpower Employment Outlook Survey, 23 percent of employers anticipate increasing staff levels during the third quarter.
“Although employers have been increasingly cautious for the last three quarters, the U.S. hiring outlook is among the strongest globally, and we expect to see modest improvements in the labor market throughout most of the country,” said Kip Wright, senior vice president of Manpower in North America. “This is good news for job seekers and organizations; as the competition for talent heats up, the way in which companies engage individuals is more critical than ever. Employers need to ensure they have the skills and resources they need – right when they need them.”
No Significant Variations Projected
Hunt Scanlon Media reports that other studies on the labor market have been equally optimistic, no matter what else seems to be happening on the American political scene or with the UK’s Brexit vote to cut trading ties with the European Union.
Fifty percent of employers plan to hire full time, permanent workers, on par with 49 percent last year, according to CareerBuilder’s 2016 mid-year job forecast. Another 29 percent of employers plan to hire part-time employees, on par with 28 percent last year; and 32 percent of employers plan to hire temporary or contract workers, down slightly from 34 percent last year.
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CareerBuilder’s study also found that information technology (68 percent), healthcare (65 percent), financial services (56 percent) and manufacturing (51 percent) are among industries expected to outperform the national average for full-time, permanent hiring in the back half of 2016.
“Based on our study, the U.S. job market is not likely to experience any major dips or spikes in hiring over the next six months compared to last year,” said Matt Ferguson, chief executive officer of CareerBuilder. “While certain industries or locations may produce more job growth, hiring overall will hold steady throughout the election season and through the end of the year.”
According to a semi-annual hiring survey by DHI Group, nearly two thirds (62 percent) of hiring managers intend to hire more professionals in the next six months.
“Increased plans for near-term sales, investment and hiring indicates modest economic improvement,” said Doug Oberhelman, chairman and CEO of Caterpillar Inc., and chairman of Business Roundtable.
“Unfortunately, it’s more of the same ‘one step forward, one step back’ we’ve been experiencing for a number of years now,” Mr. Oberhelman continued. “We need sustained, healthy growth, which would be aided by enactment of pro-growth policies, such as ratifying the Trans-Pacific Partnership and updating our outdated tax system. Absent that, the U.S. economy will continue to be stuck in the slow lane.”
Sources: US Bureau of Labor Statistics, Hunt Scanlon Media, Manpower North America & Careerbuilder
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Having spent many years at KPMG as a partner and finally as Head of Corporate Finance, Midlands, Richard Boot currently chairs and holds directorship of various companies associated with staffing and recruitment. He is also a former board member of IRC Global Executive Search Partners.