US Economy Adds 88,000 Jobs in March
The economy delivered weaker hiring numbers this month, adding just 88,000 jobs in March. Though the number of new jobs underwhelmed expectations, the unemployment rate did decline slightly to 7.6 percent. Job creation this month included professional and business services, healthcare and construction. Employment in professional and business services added 51,000 in March, with employment in accounting and bookkeeping services contributing 11,000 jobs. Healthcare added 23,000 jobs, and employment in construction continued to trend up with 18,000 new jobs. The leisure and hospitality industry further grew last month, primarily within food services and drinking places, which added 13,000 jobs in March.
Sequester – Will it Impact the Labor Market?
The answer to this question is debatable, and will be scrutinized over the next few months. The law, known as the “sequester,” mandates $85 billion in government budget cuts by the end of September. To manage the cuts, many federal entities may delay filling open positions, while others plan to require workers to take furloughs – days off without pay. Approximately 16 percent of U.S. workers are employed by the government and they arguably will spend less even if they keep their jobs because of their unpaid leave.
Although there are indications the sequester may be impacting consumer and worker confidence levels, the cuts have just started taking place and the process will be an extensive and lengthy one which could cushion the negative effects on employment. Many experts claim there is little connection between the $85 billion government budget cuts and reduced employment, although signs of layoffs related to the sequester will be watched closely over the next several weeks.
Generational Differences Do Impact the Labor Market
While employers have little influence over the impact of macroeconomic events, such as the sequester, there are many aspects of the labor market they can and should take into account. One of these broad-sweeping dynamics is the differences in generational attitudes and expectations of the workplace. As the average age of retirement continues to increase, employers are seeing a wider generational gap among their workforce and more generations sitting side-by-side than ever before.
Randstad’s latest Engagement Study examined this issue, and found Millennials (born 1982-1994) and Mature employees (born before 1946) share similar sentiments in the workplace. Namely, they are more satisfied with their current job and have a higher perceived morale than other age groups. However, an important finding for employers to consider as they seek to attract top talent, a vast majority of Millennials would give serious consideration to a job offer from another company (57 percent) and 47 percent would proactively seek out a position with a different employer.
A Mixed Bag of Consumer and Worker Confidence Levels
The Conference Board’s Consumer Confidence Index fell sharply in March, following a slight uptick last month. According to their report, the recent sequester has created uncertainty regarding the economic outlook and as a result, consumers are less confident.
The Randstad Employee Confidence Index, however, edged up for the second consecutive time reaching 53.9 in March. Yet, the survey did find a decline in macroeconomic confidence likely attributable to the sequestration, rising gas prices and lingering concerns over payroll tax increases. Although workers are feeling more apprehensive in the availability of jobs, their personal confidence levels—which measures optimism in workers’ ability to find employment and in the health of their employers—rose to its highest level since April 2010. In the midst of economic unease, U.S. workers appear to feel very good about job security, the health of their employers, and their ability to find alternative employment if needed.
Home Sales and Rising Prices Continue to Drive Rebound
Sales of previously occupied homes rose in February to the highest level in nearly three years, while builders broke ground on more houses and apartments. Perhaps one of the strongest indications the housing market is strengthening is a rise in residential real estate prices in January – hitting the highest increase since June 2006. The S&P/Case-Shiller index of property values in 20 cities climbed 8.1 percent in January from the same month in 2012. The increase exceeded the 7.9 percent median forecast by economists in a Bloomberg survey.
A rise in home values will drive more buyers into the market, incite current owners to put their house up for sale and boost new construction projects. This combined with historically low interest rates which make first-time home buying an attractive prospect, is fueling a strong rebound in housing.