The economy rolled along in February, adding 295,000 jobs to the U.S. payroll and dropping the unemployment rate to 5.5 percent, its lowest level in seven years. The latest employment numbers released by the Bureau of Labor Statistics showed impressive improvement from the average monthly gain of 266,000 jobs over the prior 12 months. Job gains occurred in food services and drinking places, professional and business services, construction, health care and transportation and warehousing.
Food services and drinking places added 59,000 jobs in February, topping the industry average which had added 35,000 jobs per month over the prior 12 months. Employment in professional and business services increased by 51,000 in February bringing the total of new jobs added over the year to 660,000. Within the sector, management and technical consulting services added 7,000 jobs, while computer systems design and related services gained 5,000 jobs.
Construction also fared well, adding 29,000 jobs to its payrolls in February, a result that was largely boosted by specialty trade contractor gains of 27,000 mostly in the residential component. Over the past 12 months, construction has added 321,000 jobs.
Healthcare employment rose by 24,000 jobs, with gains in ambulatory care services (+20,000), and hospital (+9,000). And finally, retail trade employment continued to trend up in February adding 32,000 jobs and growing by 319,000 over the year.
Why More People Quitting Their Jobs Is a Good Sign
More people are quitting their jobs according to February’s monthly employment report issued by the Bureau of Labor Statistics, which is a good thing for the overall labor market. More quits are a sign of confidence in the economy, because people typically quit when they have another job lined up, usually at higher pay, or are optimistic they can find a new position.
The report finds the rate at which workers are quitting their jobs has risen near levels not seen since before the 2008 recession, implying workers are more secure that better opportunities lie ahead. While still high, the number of unemployed workers who have been out of work 27 weeks or longer is 31.1 percent compared to 36.8 percent a year ago.
Strategies to Boost Wages
Despite an impressive and sustained hiring surge, the wages of U.S. workers remain stagnant. Hourly wages rose by 3 cents, or a mere 0.1%, to $24.78 in February. Fifteen million Americans are still stuck in the low-wage range between $7.25 and $10 per hour, according to the Economic Policy Institute.
Meanwhile, a few recent jobs-related announcements keep economists and others hopeful that wages will begin to rise more substantially in the near term. For example, Walmart, the country’s largest employer, recently indicated about 500,000 full and part-time associates at both Walmart and the company’s Sam’s Club warehouse stores will start making $9 an hour or more in April, which is at least $1.75 more than the federal minimum hourly wage of $7.25.
Meanwhile President Obama launched an initiative recently named TechHire, aimed at preparing U.S. workers for more technology jobs. The President has obtained commitments from more than 300 employers and local governments in 20 regions of the country to address the need for more software developers, cybersecurity experts and information technology engineers.
Nationally, tech-related fields have an estimated 500,000 job openings and the average salary for workers with high-tech skills is 50 percent higher than the average private-sector U.S. job, according to the White House.
Manufacturing Poised for Steady Growth
The latest Manufacturing ISM Report issued by the Institute for Supply Management (ISM), found economic activity in the manufacturing sector expanded in February for the 26th consecutive month, and the overall economy grew for the 69th consecutive month. Many economists and other reports suggest the job market for manufacturing is positioned to yield steady growth in 2015.
Companies and candidates alike need to understand the market, and Randstad’s manufacturing and staffing experts have compiled key trends and facts to consider:
- With over 357,000 current manufacturing job openings to fill across the United States, there’s an average ratio of 58 candidates per job opening. Though it may appear from this data that filling manufacturing and logistics jobs is fairly easy, positions requiring skilled labor are more difficult to fill than the national average.
- Nationally, manufacturing and logistics jobs stay vacant for approximately 55 days, which means one unfilled manufacturing job can cost a company an average of $8,500.
- A company can lose over $14,000 if a position stays vacant for three months or longer.
Consumers Choosing to Save, Not Spend
It seems even massive declines in gasoline prices aren’t enough of an incentive to send consumers rushing to the cash register or online checkouts. U.S. consumer spending fell for a second straight month in January as households continued to hold on to their money and cut back on purchases. Similar data shows factory activity slowed in February, and construction spending declined sharply in January, adding to the signs that economic growth moderated early in the first quarter of 2015.
Consumer spending, which is responsible for more than two-thirds of U.S. economic activity, fell 0.2 percent in January on the heels of falling 0.3 percent in December. Housing data for January was also weak.