Watching the nightly news or the political pundits on Sunday morning talk shows can be more confusing than helpful when trying to figure out what all the economic forecasts mean for your career prospects. Here are Smith Hanley’s interpretations of those numbers and how they might affect your career prospects in 2018.
1. 2018 Unemployment Rate Forecast of 4.1%
The U.S. unemployment rate fell to 4.2% in September 2017. This was the lowest jobless rate since February 2001. The U.S. unemployment rate averaged 5.8% from 1948 until 2017, reaching an all time high of 10.8% in November of 1982 and a record low of 2.5% in May of 1953. We got close to the all time high by posting 10% in October 2009. North Dakota and Colorado currently have unemployment rates of 2.3% beating 1953’s all time national low. The Federal Reserve considers a base unemployment rate of 5.0 to 5.2% to be full employment.
For 2018 the forecast is for unemployment to remain at levels below what is considered full employment. This means now is the time to search for a new job in this candidate’s market. The Bureau of Labor Statistics predicted that 88% of all occupations would experience growth between 2010 and 2020. All good for your career prospects, right? Read on….
2. Employment Rate versus Unemployment Rate
The EMPLOYMENT rate is the percentage of the whole population that is employed. As of September 2017 that number was 60.4%. So while the UNEMPLOYMENT rate is at prerecession levels, the EMPLOYMENT rate now has a larger number of people falling outside the labor market than in 2006. This happens for a number of reasons: people exit the labor market due to long-term unemployment and frustration with the job search, due to personal issues like caring for elderly parents or a long-term illness and some have chosen to stay out of the job market to care for children or through retirement. Our all time highest EMPLOYMENT rate was in 2000 when we reached 64.7%. If that seems low to you, it is. Mexico has an employment rate of 96.4% and Switzerland, Netherlands, UK and Germany are all around 75%.
What does this mean for you? If you are one of those frustrated unemployed or have resolved some care issues within your family, this job market should be a real opportunity for you.
3. The GIG Economy
Freelancing and contracting are more and more common. Some pundits would have you believe this is because these workers were forced into these work styles during the recent recession. They believe these workers would actually prefer permanent, full-time employment. But the benefits of making your own schedule and working when and how much you want has tremendous appeal for some people. The rise of gig businesses like Uber, Lyft, Grubhub and Airbnb is giving workers more and more options for an independent career.
The rise of this gig workforce is causing some changes on the corporate side. There is more interest in working from home . Bloomberg reported that 60% of organizations allow some sort of telecommuting, up from 20% in 1996. As attractive as that sounds 77% of companies don’t let people work from home on a full-time basis. In May 2017 IBM drastically reduced the options for their workers to work from home. They felt it hindered team work and innovation. While 80-90% of people who don’t currently telecommute would like to start, it may be a touchy subject when you interview.
4. Inflation Rate of 1.9%
This low inflation rate has been a conundrum for the Federal Reserve. With the tightening of the job market and full employment, economic theory says inflation should start to rise, but it hasn’t. The Fed has a target inflation rate of 2.0%. The fact that we are below even this 2% target means interest rates are low and companies and consumers can borrow at very low rates of interest, which theoretically should spur growth. However, this low inflation rate ‘s biggest career impact seems to be stagnant wage growth.
“Real median earnings of full-time workers – male and female, black and white – have been relatively flat since 2000,” the Economic Policy Institute said. This means decreased purchasing power, weaker bargaining power with employers and dimmer prospects for the next generation of workers. So with wage growth anemic be careful on your expectations of a large salary increase with a job change. But a job change will probably mean more money and better career prospects than staying the course at your current company.
5. Stock Market Hitting Record Highs
Low inflation, a low unemployment rate and cheap borrowing has led to a booming stock market. Some say the prospect of decreased taxes is also fueling the 35 record highs already recorded in 2017. But others are calling these increases “irrational exuberances” and feel they signal the peak of the business cycle and another recession in 2-3 years. Whom to believe? Hard to say, but this uncertainty highlights the need to stay relentlessly focused on your financial well being through improving your skills and charting a clear course for your career.
One last statistics for you marketers: the Bureau of Labor Statistics says market research analysts and marketing specialists will be one of the top five growth occupations for white collar workers for 2016 to 2026. Want to take advantage of that trend? Contact Smith Hanley Digital and Direct Marketing Recruiter, Rachel Pereira, at [email protected] or 203.319-4307.