At first glance the latest jobs data don't seem encouraging. On Friday the U.S. Labor Department reported that the economy had a net loss of 20,000 jobs in April, the fourth consecutive month of declines. But there was some good news: the number was not nearly as high as many economists had expected and it was a significant improvement over the three previous months (when nearly 240,000 jobs were lost overall). The unemployment rate even fell slightly, to 5 percent from 5.1 percent. Still, it was clear that many companies—and employees—are still being affected by the economic downturn. The construction and manufacturing sectors, which have been hit hard by the housing slump, continued to shed jobs. And employees in many other sectors appear to be working—and making—less. Average weekly salaries and hours worked were both down slightly from the month before.
Will the situation improve in the coming months? NEWSWEEK's Jennifer Barrett spoke with Tig Gilliam, CEO of Adecco Group North America, the largest employment staffing firm in the world, about the new data and what to expect for the rest of the year. Excerpts:
NEWSWEEK: The latest report shows employers cut jobs again in April, but the losses were not as bad as some economists expected. Is there reason for optimism?
Tig Gilliam: Sure. I still think we're going to see 50,000 to 100,000 job losses over the next couple of months. But this is better news than I expected. That we still have 95 percent employment isn't something you'd expect in a recession, especially considering the mortgage crisis, the issues in the financial services and credit industries, and the price shocks in energy. There hasn't been a lot of great economic news lately … The jobs market may be the silver lining.
Which sectors do you think are in the best position for growth now?
The best news in this report is that jobs for those with professional skills grew. In March that was not the case … We've seen growth in [the fields of] finance and accounting, engineering, technology and science. Yes, the job market isn't the same as it was a year ago, [when] during strong periods we were adding 100,000 to 200,000 jobs per month. But that was at a time when we weren't losing so many manufacturing and construction jobs.
Do you expect those sectors to continue cutting back?
There are issues in construction and manufacturing, particularly automotive. I think we can expect that trend to continue … We haven't seen all of the Wall Street cuts yet, either. But if you look at the financial services skills-based categories, there's still growth in many of them. That market hasn't fallen apart. It's also a matter of balancing geographic regions and skill sets.
How have different regions of the country been affected by the economic downturn?
The most challenging situation is going to continue to be in the Midwest, which has a lot of exposure to manufacturing and construction. We'll continue to see announcements from Wall Street, too. But overall there are good job markets in the New York and Boston areas, and in Washington, D.C., Charlotte, Atlanta, Houston, Dallas, Seattle and Portland. Part of that is tied to their increased needs for professional skills, like medical, scientific and engineering. It's a very good job market in those areas, despite the overall job market numbers. So it really depends on where you are and what you do.
What are your clients saying about the job market?
In North America we cover all industries and all skill sets—from clerical to light industrial to professional skills like legal, finance, and accounting—and positions for both permanent and temporary staffing … Unlike in 2001, we've seen employers continue to add permanent employees with professional skills … We still see a lot of clients active in the job market.
What are their plans for the rest of the year?
There are fewer companies saying they're adding new jobs in the second quarter than there were in the first quarter. But fewer companies are saying they're cutting either. It's a bit of a regression back to the center. We also expect to see that large companies may have more of an inclination to add jobs versus smaller companies. Some are reducing their workforce in one area but adding to their workforce in another area … The real question is, can we produce enough jobs in professional skill areas? That would fit with the long-term trend of growth in [jobs requiring] professional skills and the movement we're seeing from a manufacturing to a service-based economy.
What can a job seeker do to improve his or her chances of being hired in a tight market?
The most important thing for people to do when looking for a job is to really think about what it is that a company needs and how they can translate their skills and experience to make sure they can help solve problems for that employer … There were many people in the mortgage business, for example, who have skills in financial analysis … That's a skill many employers have a great demand for now.
How quickly do you think the overall job market will improve?
Over the course of the next few months I'd expect the job numbers are going to be negative. In the short-term I think we still have to get through some things in the economy that are keeping pressure on the overall numbers. But over the longer term I think the job market is going to be good.