If the latest jobs data could sing, the song would be “Summertime Blues.”
Even the red-hot information technology sector is taking a hit in this apparent mid-year economic slump – across the entire continent, no less. Look no further than the 2012 Mid-Year Salary Survey by Janco Associates and eJobDescription.com, which found soft hiring and salaries for most IT positions and most North American metropolitan areas.
Non-farm payrolls grew by a paltry 80,000 jobs in June, according to the Department of Labor’s Bureau of Labor Statistics – the third straight month of fewer than 100,000 new positions added to the economy. The dismal pace at which U.S. employers hired workers last month is expected to raise pressure on the Federal Reserve to take more aggressive action to put a meaningful dent in the nation’s 8.2% unemployment rate. It also is seen as another setback for the president’s re-election bid.
Manufacturing sole bright spot
One surprising development was a slightly brighter outlook for manufacturing, which added 11,000 workers. Construction employment posted its first gain since January, states BLS, representing new evidence that the nation’s shaky housing market is on sturdier ground.
Data from the Society for Human Resource Management support these findings. SHRM’s Leading Indicators of National Employment (LINE) report, which captures HR professionals’ month-ahead hiring expectations and past-month recruiting difficulty in the manufacturing and service sectors, shows that manufacturers’ hiring in July will inch up by a net of two points. What’s also noteworthy is that in June more manufacturers increased compensation for new hires compared to a year ago. A net total of 11.7% of LINE survey respondents said they upped new-hire comp in June—a 4.9-point increase from June 2011 and the highest net total in four years in that month.
However, the good news in manufacturing was offset by continued losses in the service sector. HR pros here report that hiring will plummet by a net of 17.4 points and new-hire compensation will drop by 0.6 points.
Small business pain
Two mainstays of doom-and-gloom employment activity – the pulse of small business and how young people are faring – have shown their fair share of angst in other fresh research.
For example, Vistage International reported that its small-business confidence index fell sharply to 92.8 in the second quarter of this year from a year high of 105.1 in the previous period.
This was the third straight year that the index uncovered mid-year doldrums tied to a weak economic recovery and questionable economic policies. Still, chief executives with a favorable view of the economy beat the naysayers by nearly a two-to-one margin in the most recent quarterly survey.
One interesting side note is that the latest survey reflected uncertainty about “the potential direction of economic and health care policies” ahead of the U.S. Supreme Court upholding health care reform.
Holly Wade, a senior policy analyst with the National Federation of Independent Business Research Foundation, noticed a similar pattern in the sentiment of its members last year that also was seen in the group’s most recent jobs report.
“Small business employment looked fairly strong at the beginning of the year, but has tapered off significantly over the last month,” she explains. “Our data certainly reflects weak job creation just reported by BLS and in our survey, plans for July look even worse. It appears there will be very little progress on the jobs front in the coming months.”
Young adults hard hit
That’s particularly bad news for new college graduates. The non-seasonally adjusted 18 to 29 unemployment rate data for June was 12.8%, though the grassroots Generation Opportunity explains that factoring in the labor force participation rate would push the number to 16.8 %.
Young Americans are “paying the price for the failed policies coming out of Washington that have inhibited economic opportunity and job creation,” according to Generation Opportunity President Paul T. Conway, former chief of staff for both the Department of Labor and U.S. Office of Personnel Management. He said the unemployment numbers suggest that “through no fault of their own,” this segment of the workforce has encountered fewer job opportunities alongside “delayed dreams and stalled careers.”
As a result, it may not be surprising that more than 60% of young adults ages 19 to 22 receive financial assistance from their parents – an amount that approaches $7,500 a year when factoring in rent, transportation and college tuition, according to a recent University of Michigan study. In addition, a new Gallup poll found that employer-based health insurance increased by nearly a full percentage point within the past year for adults ages 18 to 25.
Bruce Shutan, a former EBN managing editor, is a freelance writer based in Los Angeles.
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