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’ (“BLS”) press release describing The Employment Situation.  The next release revealing October’s statistics will be out on Friday, November 6^th., (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 October 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.

In this Commentary, I address the following:

• Some final observations regarding September’s disappointing numbers
• The positive and negative indications for October’s employment situation
• What to expect from the economy over the coming months

What happened in September? I expected September to generate 185,000 new jobs and a 5.1% unemployment rate. As reported by the BLS, the labor market’s growth was slower than expected, as payrolls expanded by just 142,000 jobs while the unemployment rate was unchanged.  September’s disappointing growth surprised everyone as the labor force participation rate fell, the average workweek contracted and wages were flat.  In retrospect, the slowing Asian economy, related financial market turmoil, the stronger dollar, weaker commodity prices and continued softness in the energy sector all suppressed an otherwise relatively healthy domestic economy.

What should we expect for October? I expect Friday’s Employment Situation Report covering October’s activity to indicate that the labor market expanded by 180,000 jobs and the unemployment rate held steady at 5.1%.  My sense is that underling conditions during August and September were not as weak as the official reports suggested — but clearly, the economy and labor markets are less vigorous than the May, June and July periods that averaged 243,000 new jobs.

Positive employment indicators during October included Initial Jobless Claims which remained quite low during October. The four week moving average Initial Jobless Claims during the reporting periods were improved by 9,000 during October; Continuing Claims continued trending down as well. The American Staffing Association’s Monthly Index was 0.6% improved during October compared to September and private employment surveys that I participate in continue to improve.

Less than positive employment indicators included The Conference Board’s Consumer Confidence Index which reported labor market deterioration as the differential between “jobs plentiful” and “jobs hard to get”, flipped from slightly positive to a negative 3.6 reading during October.   The Purchasing Manager’s Manufacturing Employment Index declined to 47.6 in October from the previous month’s 50.5, this index peaked at 55.5 during June and has been sliding ever since.

What should we expect during the coming months?  The economy continues to grow, albeit at a slower rate, particularly during the near-term.  There is no doubt that August, September and October were softer than earlier periods during this year, and there are continuing challenges.  On the other hand, the risk of recession is still low because there are still growing sectors in the economy, notably employment, vehicle sales and housing.  Inflation remains low and consumer confidence continues to trend upward.  Consumer spending is still the largest driver of our domestic economy and consumers remain optimistic.  The financial markets are recovering, S&P 500 stock index today closed at 2,109 which is almost exactly where it was at its peak before the correction.  Continued growth hinges on the U.S. Consumer and the notion that the Chinese economy is firming rather than falling.  These conditions are evident giving rise to the notion that the slowdown was temporary.

In conclusion, I expect October to produce 180,000 new jobs and a 5.1% unemployment rate.  The economy slowed during recent months but is resilient and is expected to continue growing at a measured but steady rate.  .  Expect labor markets to progressively tighten with ever more increasing wage pressure this year and next.  There are some headwinds but, thus far the U.S. economy proved to be resilient.  I invite you to call me if you have any questions and 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.