Throughout the start of 2019, many Economists were worried about a potential recession and predicted that a downturn was on the horizon. However as we have gotten farther into the year, the economy continues to push forward adding lots of jobs each month. In just March alone almost 200,000 nonfarming jobs were added to the market. The slow growth rates in the economy may not be from lower consumption but rather from firms not being able to get jobs filled as the labor market doesn't have the skill set yet to fill them.
Many Americans who are "qualified" to work somewhere have been struggling to find jobs in their field, as today it often requires additional education or training in order to stay relevant in a particular industry. The slow rate at which some new jobs are getting filled points to a skills gap in the labor force, particularly with the older generations. Now more than ever, firms are trying to incentivize workers to stay at their companies using things like wage increases, benefits packages, and more flexible work hours frequently rather than trying to search through the labor force with the hopes of finding someone who meets their very specific demands.
Moving forward, I am interested to see how the labor market looks throughout the rest of the year and what ties to has to the status of the economy.
SOURCE: https://www.cnbc.com/2019/04/05/americas-bustling-jobs-market-is-still-leaving-some-people-behind.html
4 comments:
Jack,
I am glad you have touched on this subject. My most recent post discussed how the amount of jobless claims (unemployment benefits) have dropped to a 50 year year low. It had also touched on the subject for your post as well. It almost seems as if recent graduates (5 years out or so) has gone into industries that were already at capacity. Now, the industries that have employment opportunities available don't have the necessary labor market to fill them. It would be interesting to see if there are any indicators demonstrating the current and predicted demand for sectors across the economy.
Even though slow growth rate now may be due to firms not being able to find skilled workers to fill these new positions, this leaves the opportunity for larger growth in the future. These jobs were just created, and there usually is a transitory period that occurs when new markets and jobs are brought to lite. This could be another sign that the US economy is not ready to enter a recession just yet. These unfilled positions represent a possible rise in GDP supporting economic growth once skilled workers are able to fill these positions.
Jack - thanks for sharing this interesting article. As many of us are seniors that are hoping to find jobs in the near future, such strong unemployment numbers are very important. The fact that the labor market still has enough appetite for more hires is definitely a positive signal for those of us that are on the job market. Alternatively, for these companies that are trying to fill vacant positions, I wonder what types of incentives they are offering? When the labor market tightens, usually companies need to have competitive wages in order to attract successful talent, but the flip side is that this can become too costly for some businesses to keep up with.
This is a very interesting article. As Hilary touched on, many of us seniors graduating will probably be looking for jobs in the next coming months and it is very reassuring to see that there are an abundance of jobs available. On the other hand, it is a little problematic for our economy if we are spending money on jobs that companies are not able to fill.
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