Finally, a monthly employment report that says we are “officially” out of the economic woods. Likewise, the data says that we have officially returned to an employee market. The following recap from Black Box Intelligence (formerly TDn2K)-retained economist Joel Naroff, together with just released Workforce Intelligence (formerly People Report) monthly data and the 4th quarter Workforce Intelligence (formerly People Report) Workforce Index, confirm what recruiters have been telling us for months now: staffing challenges are tough, and getting tougher.
Naroff Economic Advisors | Joel Naroff | President & Chief Economist
INDICATOR: November Employment Report
KEY DATA: Payrolls: +211,000; Revisions: +35,000; Unemployment Rate: 5.0% (Unchanged); Hourly Wages: +0.2%
IN A NUTSHELL: “There ain’t no stopping (them) now.”
WHAT IT MEANS: My apologies to Luther Vandross, but there really is nothing except a major crisis that will stop the Fed from its appointed first round of rate hikes. All it would have taken is a mediocre employment report to provide the necessary cover to raise rates and the November data were more than that. Job gains were solid and there were also upward revisions to both September and October. The three month average now stands at 218,000, which is quite good given that the biggest complaint businesses have is the lack of supply of qualified workers. Hourly wages rose but there was a small reduction in hours worked.
On the unemployment side of the report, almost every component was solid. While the rate remained at 5%, there were strong increases in the labor force and the number of people employed. This led to a rise in the participation rate. While I don’t think much of it, the infamous U-6 rate, which includes all reasons for not having a job, did raise a tick. However, it is still down 1.5 percentage points over the year. The stronger labor market is curing lots of ills.
Strongly corroborating Naroff’s outlook, the Q4 Workforce Intelligence (formerly People Report) Workforce Index, a barometer of market pressures on employment measures, registered an overall reading of 71.4 as strong employment pressures continued to affect the industry. This marks the sixth consecutive quarter the Index has posted an overall reading over 70. Employment expectations remain high to round out the year (81.3). Turnover remains a concern as rates continue to creep higher. However, Recruiting Difficulty is an immediate and growing concern (88.9) as more and more companies are struggling to find adequate employees.
As we prepare for our 21st Global Best Practices Conference in January, we are struck by the widening gap between the “haves and have nots” within our own consortium, with respect to thriving workplaces that support superior performance in the marketplace. Companies that are leading are being more intentional, innovative and candidly, more courageous than their competitors, and are willing to do what it will take to have a best-in-class workforce. We look forward to sharing what we have learned with you next month.
For more information on Workforce Intelligence (formerly People Report), a Black Box Intelligence (formerly TDn2K) brand, and the Workforce Index, visit the Workforce Intelligence (formerly People Report) website. You can also read the report on our most recent Workforce Index here.