We’re Wary But Hopeful As 2012 Gets Underway

Here, on this first business day of 2012, the new year is still full of promise, and optimism hangs in the air.

Consumer confidence is at the highest level in months. The U.S. economy has been adding jobs now for more than a year. When the December report is released Friday, the expectation is that it, too, will show job growth. ADP’s monthly job numbers will be out Thursday morning, offering a preview of what the official U.S. Labor Department employment data may show.

Today, the stock market is up decisively up on reports of strong growth in manufacturing, and increased construction spending. There’s even a cautious willingness among employers to add even more staff this year.

CareerBuilder says that one in four employers plans to add permanent staff this year, about the same number the job board reported for 2011. The 11 percent unsure what they’ll be doing can be read to mean that if the economy improves — as the rising consumer confidence measures suggest the country expects — then even more hiring could be coming.

Manpower’s quarterly employment survey was even a bit more positive. It found that 14 percent of employers intend to add jobs in the first three months of the year, its strongest hiring outlook since 2008.

Consumers, too, are more hopeful. The venerable Consumer Confidence Index has climbed almost 25 points since October. At 64.5, the Index is at its highest point in eight months. The holiday spirit may account for some of that, but there’s also evidence that employment prospects are brightening. The Conference Board’s employment trends index was up 6.4 percent in November compared to the year before. (December’s result will be released next week.)

Last week, Challenger, Gray & Christmas found that 30 percent of the callers to its annual free, phone-in job help line were optimistic they would land a job within three months. In 2010, only 18 percent thought that was the case.

Since June the number of new jobs created each month has been above 100,000. It’s still a slow growth rate, but it’s a significant improvement over 2010 when six out of the 12 months showed job cuts.

“We continue to hear people say that the U.S. recovery is fragile, and that’s the wrong word,” says Michael Gapen, an economist with Barclays Capital. “It’s durable. It’s just not robust. It’s a moderate expansion.”

That’s one reason companies have been hesitant to add permanent staff. It’s also likely that employers recall that after a strong start to 2011, the recovery stalled as the financial markets began recognizing the seriousness of the European debt crises. In the first four months of 2011, some 714,000 jobs were created. Less than half that were created in the next four months.

World economic conditions are still far from stable. Iran is threatening to blockade the Strait of Hormuz, which is starting to send oil futures up. Bank lending hasn’t loosened much and a Presidential election creates more uncertainty about future U.S. economic policy.

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With that baggage causing employers to be especially cautious, Monster says that temp hiring is likely to be strong well into 2012. Indeed, in its December report, the American Staffing Association reported that the staffing index has been climbing, slowly, but steadily, since February 2011. The index is now pretty much where it was at the end of last year.

No wonder, then, that job seekers are tempering their expectations about finding permanent work. That Challenger, Gray & Christmas survey also found that many more job seekers this year expect their job search to last a year. In 2010, 4 percent thought that. This year, 10 percent do.

“There was a lot more uncertainty a year ago. Almost half of last year’s callers had no idea how long the job search would take. This year, callers were either certain of the job market’s improvement or certain of its continued weakness,” said John A. Challenger, CEO of Challenger, Gray & Christmas, referring to the increase in both optimistic and pessimistic callers.

Among the unemployed callers, 37 percent have been out of work for one to six months. Another 14 percent have been jobless for 7 to 12 months. As an indication of how tight the job market remains, the remaining 50 percent of callers had been jobless for a year or more, with 60 percent of these long-time job seekers out of work for two years or longer.

CareerBuilder’s CEO Matt Ferguson predicts a somewhat brighter employment picture for 2012 than the numbers — or the job seeker survey might — imply.

“Historically, our surveys have shown that employers are more conservative in their predictions than actual hiring,” says Ferguson. “Barring any major economic upsets, we expect 2012 to bring a better hiring picture than 2011, especially in the second half of the year.”

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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5 Comments on “We’re Wary But Hopeful As 2012 Gets Underway

  1. I’m seeing more optimism among both employers and job seekers. As more profitable, growing companies continue to seek already employed candidates for their planned growth, I expect we’ll see those companies that had not planned for growth turn to the previously overlooked unemployed candidates to fill their openings.

  2. Keith sez (again):
    “The Great Recession for Unemployment will end when we have three straight months of 7% or lower UE.” (See below)

    Cheers,

    Keith “Not Holding My Breath Until We’re There” Halperin

    …………………………………………………….

    Recent Forecasts (http://myweb.rollins.edu/wseyfried/forecast.htm)

    AP Economic survey (Dec 27): economic growth = 2.4% in 2012; unemployment = 8.4% by election day; average number of jobs created each month = 177,000

    Wells Fargo Securities Economic Forecast (annual forecast-Dec 7; latest monthly forecast, Nov 2011; latest forecast, Dec 23-latest weekly analysis): economic growth = 3.5% in Q4, 1.4% in 2012Q1; 2.1% in 2012 and 1.8% in 2013; core PCE inflation = 1.5% in 2012 and 1.6% in 2013; CPI inflation = 1.9% in 2012 and 2% in 2013; unemployment rate rises to 9.1% in 2012Q2, 8.9% by end of 2012 and 8.8% by the end of 2013; economy adds just under 1.5 million jobs per year in 2012 and 2013

    Livingston Survey (latest survey – Dec 2011): economic growth = 2.1% in first half of 2012 and 2.5% in second half of 2012; unemployment rate = 8.9% in June 2012 and 8.7% in Dec 2012; inflation (CPI) = 2.2% for 2012 and 2.3% for 2013; long-term economic growth = 2.6%, inflation averages 2.5% over the next decade

    Economic forecasting survey, Dec 2011 (WSJ): economic growth = 2.8% in Q4, 2.1% in 2012Q1, 2.3% in 2012, 2.7% in 2013, 3.1% in 2014; unemployment at 9% at end of 2011, 8.5% at end of 2012, 8% at end of 2013, 7.2% at end of 2014; inflation = 2.2% in 2012, 2.4% in 2013 and 2.5% in 2014; Fed begins raising interest rates in second half of 2013; 23% chance of recession in US in 2012, 65% say the Eurozone is in recession while 27% say it’s imminent.

    OECD Economic Outlook (Nov 2011): economic growth = 2% in 2012, 2.5% in 2013; inflation = 1.9% in 2012, 1.4% in 2013; unemployment rate = 9.9% by end of 2012, 8.4% by end of 2013; budget deficit = 9.3% of GDP in 2012, 8.3% of GDP in 2013

    NABE September survey (Nov 21-CNBC): economic growth = 2.4% in 2012; unemployment rate = 8.7% at end of 2012, inflation = 2% in 2012, interest on 10-year T-bond = 2.7% by Dec 2012

    Univ. of Michigan Economic Forecast (executive summary – Nov 17, 2011): economic growth = 2.5% in 2012 and 2.5% in 2013; core inflation (CPI) = 1.7% in 2012 (overall inflation = 2.2%) and 1.6% in 2013; unemployment rate rises to 9.2% by early 2012, averaging 8.9% for all of 2012 before declining to 8.5% by end of 2013

    Survey of Professional Forecasters (latest survey Nov 2011): economic growth=2.6% in Q4, 2.4% in 2012Q1; 2.4% in 2012, 2.7% in 2013, 3.5% in 2014; core inflation (PCE)=1.6% in 2012 and 1.8% in 2013 (overall PCE inflation=1.9% in 2012, 2.2% in 2013); unemployment rate=9% in 2011Q4, 8.7% in 2012Q4; average unemployment rate = 8.4% in 2013, 7.8% in 2014

    Fed Forecast as of November 2011: economic growth = 1.6-1.7%% in 2011, 2.5-2.9% in 2012, 3%-3.5% in 2013; long-run economic growth = 2.5-2.8% (note: these are from 4th quarter to 4th quarter); unemployment rate = 9-9.1% in 2011, 8.5-8.7% in 2012 and 7.8-8.2% in 2013 (estimates are for 4th quarter of the respective year); natural rate of unemployment = 5.2 to 6%; inflation as measured by core PCE index of 1.8 to 1.9% in 2011, 1.5 to 2% in 2012 and 1.4-1.9% in 2013

    Quarterly economic survey (USA Today – Oct 31, 2011): economic growth = 2.4% in 2012; unemployment rate little changed over the next year

    IMF (September; see p75/pdf page 5): US economic growth = 1.5% in 2011, 1.8% in 2012; unemployment rate averages 9.1% in 2011, 9% in 2012; inflation = 3% in 2011, 1.2% in 2012

    CBO (September update; for Aug forecast, click here): economic growth = 1.5% in 2011, 2.5% in 2012; unemployment close to 9% thru end of 2012; from Aug forecast – core PCE inflation = 1.3% in 2011 and 1.4% in 2012; growth in potential GDP = 2.3% from 2011-2016 and 2.4% from 2017-2021; natural rate of unemployment = 5.2 to 5.3% (don’t reach that rate until 2016)

    OMB (Sep 2011 – see pdf page13-14): The OMB includes 2 sets of forecasts – one was its original midterm review forecast made in June, the other is an alternative forecast reflecting information available through late August (alternative forecast is on pages 13-14; June forecast is on page 9) economic growth (4th quarter 2010 to 4th quarter 2011) = 1.6% in 2011, 2.9% in 2012, 3.8% in 2013 and 4% in 2014; unemployment averages 9.1% in 2011, 9% in 2012; end of year based on June forecast = 8.6% in 2011, 8.2% in 2012; inflation = 2.8% in 2011, 1.9% in 2012; natural rate of unemployment = 5.2%, growth in potential GDP = 2.5% (economy returns to potential at the end of 2017); see pdf page 12 for comparison with other forecasts

  3. @ Steve: This is good news. At this rate of 350k jobs/mo (hope it’s net and not gross), how long would it take to get down to 7.0%?

    Cheers,
    Keith

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