Friday, June 3, 2011

Mixed Messages on the Job Front

The Bad News.

The ADP Report for May was disappointing, with only 38,000 private sector jobs added – a drastic drop from the 177,000 jobs added in April, and less than one-fourth the increase estimated by analysts.  The drop immediately prompted a selloff ending in the Dow Jones down 279 points.

In addition, the Bureau of Economic Analysis states despite the fact that income growth had looked to be accelerating, in reality, real disposable income barely grew over the past three quarters.  The three-quarter growth string is: 1.0%, 1.1%, and 0.8%.  Not good.

And while the GDP report shows profits for U.S. businesses jumping 8.5%, compensation for employees doesn’t reflect this increase.  Nationally, nominal compensation to employees only increased 3.7%.

Finally, in the past week, unemployment filings jumped from 324,000 to 424,000.  Anything above 400,000 is viewed as indicative of a weak labor market.

The Good News.

IT employment increased by 5,000 jobs in April.  The IT Executive Outlook survey reported 36% of IT companies plant to hire, and 41% plan to hire long-term employees.

And, one state in particular has shown steady, long-term growth.  Texas has added 732,800 private sector jobs in the last 10 years, including over 250,000 in the last year.  Not coincidentally, Texas was rated favorably by CEOs in the Chief Executive survey as having high labor market flexibility, a small government, and weak unions.

Other states with promising growth include Arizona, Utah, North Dakota, Washington, and Virginia.

*Interested clients and job seekers may contact TRC Staffing Services at our Austin and Dallas Texas locations.


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