A hiring slowdown in March might imply a weaker job market. The economists are being cautious with their predictions until seeing the employment figures for April. There are varying opinions whether this is a trend or not.
As an executive in job search mode, keeping abreast of how the economy is influencing the job market is important. How might these factors affect you? Let's look at a couple of indicators.
Growth in economy
The economy has been tied to job growth for decades. If it doesn't grow fast enough to support job growth, then the numbers go down. Typically jobs increase in the first quarter of the year. The economy is predicted to grow 2.5% this year. With March reflecting weaker number of hires, economists fear that hiring won't pick up until the economy picks up the pace.
Who isn't concerned about the rising prices of gasoline these days? The expectation was that people would continue to pay higher and higher prices at the gas pump. However, what has transpired is that people are more prudent with their gas usage because of the squeeze on their budget. According to Joel Naroff, Chief Economist at Naroff Economic Advisors, "Consumers drive about 70% of U.S. economic activity, so their spending is crucial for economic and job growth."
Have you heard salary isn't keeping up with inflation. As companies cut back, salary is one area that gets hit. Earnings are not being adjusted for inflation at the same rates as they previously were. And, if a company is able to hire, the new employees are being hired at significantly lower salaries. The Bank of America economists say the income trends are hardly a positive for consumer spending.
The job market may not reflect strong numbers when it comes to measuring the unemployed getting back to work because millions have just given up looking. This skews the percentages. If you see the unemployment rate dropping significantly, one factor can be that people have taken themselves out of the workforce.
The United States is still recovering from the recession suffered a few years ago. About 8.8 million jobs were lost between January 2008 and February 2010 with only about 40% of those jobs being recovered. Heidi Shierholz, an economist with the Economic Policy Institute, calculates that, accounting for population growth, the United States would have to create 350,000 jobs a month for three years to return to pre-recession employment levels. That’s nearly three times as many jobs as the economy generated last month.
Executives need to take a hard look at these statistics and information. All of these factors will affect you either in the job you currently hold or in your job search. Keeping a keen eye on the economy is helpful to know where the next clues may be found for economic growth and a possible surge in hiring. When the economy is good, everyone knows where to find jobs. When the economy is in a state of flux as it is today, you need to have strategies in place to find those few jobs available at the top of the pyramid.