Sunday, January 12, 2014

Where will U.S. Job Growth come from?

  • Last Friday, the U.S. Bureau of Labor Statistics (BLS) said that 74,000 jobs were added during December (significantly below economists' estimates of about 197,000), with growth primarily in part-time and lower paying jobs.  In addition, the unemployment rate fell to 6.7%, down from 7.0% in November, with the decline mostly a result of 525,000 people dropping out of the workforce.  Notably, the labor-force participation rate declined to 63.2%, the lowest since March 1978).  (This rate measures Americans employed or looking for work)
  • BLS also recently published its Occupational Outlook Quarterly with projections through 2022 and cites that “the health care and social assistance sector and the construction sector are projected to continue growing more than twice as fast as the average for all industries. In construction, projected rapid employment growth represents the continued recovery of significant job losses that occurred during the 2007–09 recession” and “construction is to regain jobs that were lost during the 2007–09 recession, but these 1.6 million jobs are still not expected to be enough to return construction employment to its pre-recession level … industries projected to gain the most jobs are related to health care.”
  • Top areas for news jobs (presented with May 2012 median wages) are projected to be personal care aids ($19,910), registered nurses ($65,470),retail sales ($21,110), home health aides ($20,820), fast food workers($18,260), nurses assistants ($24,420), administrative assistants ($32,410),customer service reps ($35,580), janitors and cleaners ($22,320) and construction laborers ($29,900).
MY TAKE
  • Regarding the jobs estimate miss - as economists cite that cold weather conditions may have impacted their estimates, it may also suggest that the profession suffers from too much “group think” and not enough “independent analysis”.
  • Regarding the U.S. occupational outlook - the BLS report supports the view that, lacking initiatives driven by innovation and infrastructure spending, the U.S. economy will be driven by the need to care for an aging population.  

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