The Herman Trend Alert|
December 8, 2004
Breakthrough: Employment Picking Up
As we completed the election campaigns in the United States, the economy showed signs of improvement. Those indicators, combined with relief that the campaigns would be over and corporate expansion could resume, stimulated job growth. Our forecasts are becoming reality.
An early sign was the drop in unemployment benefit claims in late October. Initial claims were down 19,000 during the week before elections, a larger decline than was anticipated by economists. According to the US Department of Labor, the number of former workers receiving state unemployment checks fell by 20,000 to 2.8 million during the previous week.
People are returning to work. Companies are hiring. The economic cycle is gaining strength in the United States, and will flow over to other countries soon. Non-farm payroll employment increased by 337,000 in October, while the unemployment rate was about unchanged at 5.5 percent. We expect to see this trend continue: more people employed, but not much impact on the unemployment rate. More people are coming back into the workforce, so the statistics will show them as unemployed until they actually find a job.
Employers are gaining courage and optimism to make decisions necessary to grow their businesses. We will see significantly more activity in employment.
At the same time, many businesses will grow quietly, recruiting and hiring highly talented people without their competitors discovering their strategy.
There only way to measure this stealth growth is anecdotally. We hear many stories from employers confirming this silent strategy of capacity building.
There is a problem, however.. Workers needed to fill the available jobs may not have what it takes to deliver expected performance. Fewer than half of the over-age-26 group seekers report excellent skills at solving large complex problems and handling stress. Even fewer believe they understand how a business operates and makes money, according to a survey of job fair participants in Pennsylvania.
Less than 39 percent of respondents rated computer skills as above average or higher, and approximately 44 percent of respondents gave a weak rating for ability to use the Internet and e-mail.
Employers will discover that truly qualified applicants are in short supply.
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