By Steven R. Drexel, President and CEO of Cornerstone Staffing Solutions, Inc.
As an Economist and seasoned staffing industry professional, I’m regularly asked to participate in a number of monthly surveys and discussions that predict key elements of the next Bureau of Labor Statistics’ press release of The Employment Situation. The next release covering July’s statistics will be out on Friday, August 7th, (typically the first Friday of each month reporting on the previous month’s activity).
The BLS offers many statistics covering weekly, monthly, quarterly, and yearly data and comparisons. Insofar as I dive deep into the data (national, industry and company), this commentary shares my thoughts and observations directly related to predicting how July will perform compared to the recent past. Cornerstone’s stakeholders and other interested parties may find the following remarks helpful in assisting with business strategies and objectives for the near term.
First a few words about the June release. There were mixed signals in last month’s report covering June activity. The headline numbers, a 223,000 increase in employment, was steady but not exciting. And while the unemployment rate improved to 5.3% from 5.5%, it was due to a decline in the number of individuals active in the labor force rather than an abundance of demand. Further, average hourly earnings were flat and the average work week was unchanged at 34.5 hours. In summary, the growth was adequate but the other factors signaled less hearty improvement.
What should we expect for July? I expect that the employment growth during July will roughly match the change initially reported during June — although my bias is for improvement.
Positive indicators include Initial Jobless Claims which have continued to improve and were particularly low during the July 15th reporting period. Additionally, the employment component of the Purchasing Manager’s Manufacturing Index improved to 55.5 up from 51.7 during June.
On the negative side of the ledger, Consumer Confidence took a hit during July and in particular the differential between “jobs plentiful” and “jobs hard to get” deteriorated to -6.0 from -4.8 in June. Also, the Purchasing Manager’s Non-Manufacturing Employment Index declined to 52.7 in July from the previous month’s 55.3 reading.
Mixed indications included, The American Staffing Association’s Staffing Index was flat to slightly down sequentially in July (adjusting for the holiday) while other private surveys are showing improvement.
The general economy is tracking along at a steady approximate 2.4% annual growth rate consistent with continued stable employment growth and a gradually declining unemployment rate.
In conclusion, I expect July to produce 240,000 new jobs and a 5.3% unemployment rate. For most employers, this means that the employment picture will remain healthy and on the right path toward full employment next year. Expect labor markets to gradually tighten with progressively increasing wage pressure this year and next. I invite you to share this commentary with your colleagues and professional network.
More About Cornerstone Staffing Solutions
Cornerstone Staffing Solutions is among the top 120 largest staffing firms in America, as ranked by Staffing Industry Analysts. Since 2003, Cornerstone has grown from a neighborhood staffing provider to a $100 million national firm that employs thousands of people at hundreds of companies from California to Connecticut. Providing candidate searching and job placement for administrative, industrial, technical, sales and transportation positions, Cornerstone truly is where talent and jobs meet. Visit us at: www.cornerstone-staffing.com.