February’s employment situation is brighter than previous months, adding 175,000 new jobs to the economy and the unemployment rate changes slightly to 6.7 percent. The report indicates the country may be digging its way out of a weather-induced slowdown, with Mother Nature impacting work, spending, utility bills and more. The professional and business services sector took center stage this month, adding 79,000 jobs in February, with employment in the temporary services industry continued its upward trend adding 24,000 jobs. Over the past 12 months, professional and business services added an average of 56,000 jobs per month. The wholesale trade and construction industries also performed well this month, gaining 15,000 jobs respectively. Employment in health care changed little in February, gaining 10,000 jobs and marking the third consecutive month of little employment change in this industry.
Consumer Spending on a High, But Still a Rollercoaster
Consumer spending has been erratic since the recession ended in 2009, with a current surge to 0.4 percent in February – twice as much as economists polled by MarketWatch had expected. However, the increase in spending was attributed to sharply rising utility bills, with electricity and natural gas spending rising by a combined 13.7 percent, accounting for about half the increase in consumer spending in January. Consumers also spent more money on medical expenses with healthcare spending rising 1.6 percent in January.
However, many economists are optimistic consumer spending will be boosted once spring and warmer weather appears. Pent up demand and a slight increase in the average income of Americans by 0.3 percent in January may also contribute to higher spending, which will help drive the U.S. economy. Consumer spending accounts for more than two-thirds of the nation’s economic activity.
Factory Activity Heightens, Among Many Signs of Strengthening Economy
On the heels of increased consumer spending in January, U.S. factory activity also rebounded last month from an eight-month low. The Institute for Supply Management reported its index of national factory activity increased to 53.2 in February after declining to 51.3 in January – its weakest reading since May. Any reading above 50 points is indicative of economic expansion. Meanwhile, manufacturers couldn’t escape the impact of Mother Nature, indicating winter weather was still hindering operations, hampering logistics and causing back-ups at ports.
The improved factory activity is among many signs of a comeback for the U.S. economy. A gain in construction spending alongside reports from automakers that sales edged up from January’s weather-depressed levels, point to upward momentum in the short-term.
Employee Confidence Levels Dip Slightly
According to the Randstad U.S. Employee Confidence Index in February, optimism among American workers declined 2.7 points to 54.0. The Index, which measures sentiment around employers, job prospects and the economy at large, decreased from last month’s five-month high, but remains .5 points higher than this time last year. Furthermore, a growing number of workers indicated they are likely to conduct a job search over the next 12 months.
Similar findings were reported by the Conference Board this month, indicating the Consumer Confidence Index fell moderately in February to 78.1, down from 70.4 in January. The decline was driven by the Expectations Index, which dropped to 75.7 from 80.8. Although expectations have fluctuated over recent months, sentiments about current conditions have continued to rise. The Present Situation Index is now at its highest level in nearly six years, at 81.7. It appears consumers believe the economy has improved, but do not foresee tremendous improvement in the future.
U.S. Employers Have Rosy View of Workforce Attitudes, Employees Feel Otherwise
The most recent Randstad Engagement Study has uncovered a mismatch between employers and their workers when it comes to how employees feel about their jobs and what is most important to engagement and satisfaction. For example, when workers were asked if they felt inspired to do their best, 72 percent agreed. Yet, when employers were asked if their employees feel inspired to do their best work, a full 81 percent agreed. Similarly, 85 percent of employers say their employees are proud to work for their company, compared to 71 percent of workers.
This disconnect also exists in employee engagement measures. The study found the top two ways workers believe are most effective in keeping them engaged are:
Offering promotions or bonuses to high performing employees
Being flexible or accommodating in terms of hours or working arrangements
However, when asked how many of their employers actually provide these top incentives as a means to keep them engaged, only 23 percent and 37 percent are doing so respectively. Employee engagement is not just a nice-to-have factor that organizations should consider – it can have a tangible impact on a company’s bottom line. Engaged workers are invested in their organizations, and more committed to the overall mission of their employer.
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