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 November’s statistics will be out on Friday, December 4^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 November 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.

What you’ll find in this Commentary:

• All hail October  and its blowout numbers
• Will November’s employment situation mirror October?
• How the economy may perform into early 2016

October’s encouraging report. As reported by the BLS, the labor market’s growth was much stronger than expected as payrolls swelled by  271,000 jobs while the unemployment rate declined by a tenth of a point to 5.0%.  October’s break-out growth surprised everyone following two disappointing reports during August and September.  Equally encouraging was the observation that wage growth accelerated to 2.5%, up from the 2.2% average for the prior six months.  Labor force participation held steady a historically low 62.4% and the average workweek was unchanged at 34.5 hours.  The rebound in jobs growth during October was very welcome news in that it reassured analysts who had observed a slowing general economy and worried that if employment also lost significant momentum, then continuing broader economic growth would be severely challenged.

Can we expect a two-peat for November? I expect Friday’s Employment Situation Report covering November’s activity to indicate that the labor market expanded by 205,000 jobs and the unemployment rate held steady at 5.0%.  My sense is that October’s welcome growth included some catch-up related to the weaker prior month so the three-month moving average, which is an 187,000 increase in jobs, is a better reflection of the underlying conditions.

Positive employment indicators during November included Initial Jobless Claims which remained quite low during November suggesting a continuation of recent trends.  The Purchasing Manager’s Manufacturing Employment Index improved to 51.3 in November, up from the previous month’s 47.6, providing a glimmer of hope in a sector that had been softer earlier during the year.   The Wall Street Journal’s November Economic Survey of 72 leading economists forecast of employment is 1.7% higher than the October forecast. The American Staffing Association’s Monthly Index was 0.57% improved during November compared to October suggesting that job growth should be the same or better than recent trends.   Finally, the private employment surveys that I participate in continued to improve during November, again suggesting that job growth should be the same or better.

A less than positive employment indicator was The Conference Board’s Consumer Confidence Index which reported labor market deterioration as the differential between “jobs plentiful” and “jobs hard to get”, declined sharply to a negative -6.3 reading during November down from -1.9 during October.   This metric speaks to how the general public perceives the ease of finding or switching positons — likely reflecting a bit of caution that snuck in during the choppy fall employment environment.

Expectations for December and into 2016. Employment growth remains a pillar supporting the general economy and will remain so as we shake off the effects of a stronger dollar and weaker foreign growth which negatively affects manufacturing.  Other pillars include vehicle sales and housing.  Wage growth is at last starting to improve which along with continued employment growth will support improved consumer spending.  Consumer spending is still, by far, the largest and most potent sector of our domestic economy.  The economy has not been growing fast, and is not expected to accelerate materially, but we benefit from the cumulative effect of an impressive 61 months of employment growth, gradually but steadily marching toward “full employment”.  Full employment coupled with improving wage growth supports improved spending and a growing economy.

In conclusion, I expect November to produce 205,000 new jobs and a 5.0% unemployment rate.  This would represent slower growth than what was reported during the October rebound, but moderately faster than the recent three-month moving averages.  The resumption of robust jobs growth during October was a reassuring conformation that the pause during August and September was temporary.  The broader economy slowed during recent months but is resilient and is expected to continue growing at a measured but steady rate.  The forecast calls for more of the same kind of growth, but the cumulative impact results in more acute labor shortages and accelerating wage pressure.  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.