Relocation Could Rise With Home Prices

With the recent report on home prices showing the biggest year-over-year gain in more than six years, one employment authority predicts a surge in relocation by job-seeking homeowners in 2013, which could ultimately help to accelerate the decline in unemployment rates.

“One factor that has kept unemployment rates high has been the inability of underwater homeowners to relocate for employment opportunities.  With home prices bouncing back, even those who may now simply break even on a home sale might consider moving to a region where jobs are more plentiful.  This could spark a more rapid decline in the unemployment rate over the next year,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.

As of December, there were still more than 130 metropolitan areas where the unemployment rate stood at 8.0 percent or higher and nearly 50 where the rate was at or above 10 percent, according to data from the Bureau of Labor Statistics.  Meanwhile, there are about 20 metropolitan areas where unemployment is below 4.5 percent.

“It is likely that employers in these low-unemployment regions are actually struggling to find available workers with the skills need to fill job openings,” said Challenger.

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This morning’s report showing an unexpected drop in new home building will increase worries about the strength and sustainability of the recovery.  A housing recovery is a key component to the overall recovery, as home building and home buying result in significant job creation; not only in construction, but in consumer goods manufacturing, retail and service sectors.  While the new construction data is certainly disconcerting, observers might be encouraged by one trend that appears to be gaining traction: more young adults finally leaving their parents’ home to live on their own.  As reported by Bloomberg BusinessWeek, the improving job market will help the roughly 20 million adult children currently living with their parents realize their dream of independence. UBS Securities estimates that nearly 1 million new households will be created this year.  And with each new household comes spending on new furniture, new appliances, new drapes and other consumer goods; purchases which further stimulate the economy and lead to more job creation.  How important is housing to the economic recovery?  Where will job creation be the strongest as new households are created?  Will this year’s crop of new graduates be heading back to the nest or is the job market improving enough for them to live on their own?

College Grads Face Better Market, Stiff Competition

With the nation’s employers finally beginning to ramp up hiring, this year’s crop of nearly 1.7 million college graduates should enjoy the most welcoming entry-level job market in the last three years.  However, finding a position will by no means be easy and many spring graduates may have to settle for less money or for a job outside of their preferred career path, according to a new outlook from global outplacement consultancy Challenger, Gray & Christmas, Inc.

“Entry-level hiring has not returned to pre-recession levels, but this year’s graduates should find markedly improved job-search conditions.  Colleges and universities around the country are reporting increased on-campus recruiting and surveys of employers indicate more graduate hiring, as companies rebuild their bench-strength after massive layoffs during the downturn,” saidJohn A. Challenger, chief executive officer of Challenger, Gray & Christmas.

After months of tepid job creation, it appears that employers are finally beginning to accelerate hiring.  The latest data from the Bureau of Labor Statistics show that in 2010, private-sector payrolls averaged net gains of 98,000 new jobs per month.  In the first three months of 2011, average monthly job gains have jumped to 188,000.  In February and March alone, private-sector employers added 470,000 new jobs, the largest two-month employment gain since 2006.

The surge in hiring could not have come at a better time for college seniors, many of whom are just a few weeks away from graduation.  A survey of 170 employers by the National Association of Colleges and Employers ( found that they plan to increase hiring of new graduates across all degrees and majors by 21 percent.

In a broader survey of 4,600 employers, the Collegiate Employment Research Institute at MichiganStateUniversity( found that hiring for graduates with bachelor’s degrees will increase about 10 percent.  That represents the first increase in hiring for these graduates in two years, according to the Research Institute’s report.

Meanwhile, several campuses across the country are reporting increased recruiting visits by employers.  The Texas Christian University newspaper, The Daily Skiff, reported that the number of on-campus interviews at the school was up 10 percent from a year ago and that the number of employers participating in the school’s spring career expo increased from 63 in 2010 to 80 this year.  TheUniversity ofMichigan reports a 47-percent increase in on-campus recruiting since fall.  Employer participation in the annual “Just in Time” job fair at theUniversity of California -Berkeley recovered to the point that the event returned to a two-day schedule after three years of being compressed into one day.

“There definitely is pent up demand for entry-level workers.  During the recession, many companies made significant cuts to their workforce, retaining only the most talented and most experienced workers.  As companies begin to rebound, they will focus on finding and cultivating the next crop of talent,” said Challenger.

The demand for entry-level workers can be seen in Bureau of Labor Statistics data showing that 20- to 24-year-olds saw the largest employment increase over the first three months of 2011.  The number of people in this age group working grew by 308,000 or 2.4 percent.  Employment among 25- to 34-year-olds and 35- to 44-year-olds each grew by less than one percent, and employment among 45- to 54-year-olds fell by 1.1 percent.

“In this hiring environment, recent graduates have two distinct advantages.  First, they presumably have the basic skills necessary to succeed in the workplace, but, as far as the employer is concerned, they are blank slates.  This is a good thing for an employer that wants the ability to mold its next generation of workers, as opposed to re-shaping someone who came from another employer with ingrained work habits, skills, and knowledge that may not fit with the company’s culture or approach to business,” said Challenger.

“Secondly, recent college graduates are extremely flexible in terms of where they work and when they work.  They are not tied down by an underwater mortgage or a family, so they can go wherever the company needs them to go.  And, because many don’t have the family commitments that many 30-something and older workers do, they are more willing to work longer and/or non-traditional hours,” he noted.

Even with the entry-level market improving, Challenger warns that finding a position will remain challenging and fiercely competitive.

“Graduates are not only competing for jobs with their fellow classmates, but they are going head-to-head with people who graduated in 2010, 2009 and even 2008.  Some of these job seekers might already have some on-the-job experience, while others have been waiting tables or working in other non-career areas until the job market improved.  Competition will also come from people who are currently employed, who see a healthier job market as an opportunity to seek greener pastures,” said Challenger.

“The competitive nature of the job market requires an aggressive approach to the job search.  Soon-to-be graduates cannot expect to hand out a few resumes at job fairs and reply to some online postings and simply wait for the offers to come pouring in.  Make no mistake, job fairs and online job boards have their place in the job search, but to be successful a well-rounded strategy is required.

“One of the most important elements of a successful job search, for both entry-level job seekers and their more-experienced counterparts, is networking and meeting face-to-face with people who can help advance the job search.  College graduates who believe they are too young to have an effective network are simply wrong.  Parents, professors, former internship supervisors and even college and former high school classmates can be valuable sources when it comes to building and expanding one’s network,” said Challenger.

“Finally, graduates should not confine their searches to a specific industry or occupation.  The job market is not robust enough to provide the ideal job situation for every individual.  It seldom is.  So, someone may come out of college with the plan to find a marketing position with a consumer products company.  There’s nothing wrong with having a specific goal like that, but don’t make the mistake of adhering to it so closely that you overlook opportunities in marketing for a chemical company or health care provider, for example,” he said.

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 While the economy is technically in recovery and the job market is beginning to show some signs of life, it is difficult for most Americans to feel very optimistic, as evidenced by recent declines in the two leading measures of consumer confidence (The Conference Board and The University of Michigan). Why all the pessimism? While it is true that employers are beginning to increase hiring, the pace is slow and many of the biggest hiring plans involve lower-paying, hourly-wage positions in retail and food service. Meanwhile, those with jobs have not been able to boost their salaries, despite the fact that costs for daily necessities like food and gas are on the rise. The lack of hiring and salary increases is due partly to the fact that productivity has continued to rise throughout the recession and recovery. As a result, employers have little incentive to boost their payroll costs. Consumer confidence could receive another blow this week if Congress is unable to reach a deal on the budget and the government is forced to shut down. What are the biggest obstacles to increased hiring? Do higher food and energy costs pose a threat to the recovery? How might a government shutdown impact the economy as a whole?

February Job Cuts Surge 32 Percent

The number of planned job cuts announced by U.S.-based companies increased for the second consecutive month in February, rising to 50,702, the highest total since March 2010, according to the latest report on monthly job cuts released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The 50,702 job cuts announced last month was up 32 percent from January’s 38,519.  It was 20 percent higher than the 42,090 planned layoffs announced in February 2010.  This marks the first year-over-year increase in monthly job cuts since May 2009 when job cuts totaling 111,182 surpassed the 103,522 layoffs announced the same month a year earlier by seven percent.

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Government Cuts Threaten Growth

The push in Washington to chip away at the massive deficit will undoubtedly have some negative short-term consequences for the economy.  While many economists agree that the growing deficit is the biggest long-term threat to the nation’s economic health, many also believe the recovery remains too weak to impose massive spending cuts or tax increases.  Certainly, massive spending cuts will most likely lead to widespread job cutting within the government.  And, without a budget agreement in place soon, we could soon have unpaid furloughs for workers throughout all agencies.  “It is easy for critics to paint big government as this faceless organization, but the reality is that governments employ millions of people across the country; people who drive our economy by spending money on groceries, clothing, consumer electronics and vacations.  Ironically, the spending cuts that have been proposed by both parties and at all levels of government will hardly make a dent in the federal, state and local deficits, but they will make significant dents in the ability of their workers and former workers to spend money, pay their bills and otherwise contribute to the economy,” said Challenger.  Is there any way for governments to spur growth without further increasing the deficit?  How many job cuts did government agencies announce in 2010 and will that increase in 2011?   

Should Job Seekers Heed Jobs Data?

Job Seekers Receive Mixed Signals

New claims for unemployment increased at a higher-than-expected rate last week, according to a report out today, which may deflate confidence among job seekers who were starting to regain hope about their employment prospects.   At the same time, however, a separate report showed that the index of leading indicators rose in January for the seventh consecutive month, signaling a continuation of the expansion into 2011.  So, which report is correct?  The weekly jobless claims report is notoriously volatile and is impacted by unforeseeable factors such as weather.  The report on leading indicators and other macro-perspectives of the economy and job market, including the monthly employment situation report, give the view from 30,000 feet.  For job seekers to gauge what is happening in their area, it may be necessary to ignore the national reports and just look around, says John A. Challenger, chief executive officer of outplacement firm Challenger, Gray & Christmas.  Do you see more “help wanted” signs?  Are the roads more congested during rush hour?  Is the lot at the commuter train station fuller than it was six months ago?  Are you starting to hear about more friends and acquaintances finding new jobs?  These are the things job seekers should be watching for at the ground level.  Why should job seekers basically ignore any news reports they see about the national and local job market? What can job seekers do to jump-start their search if they seem to have hit a dead end? 


To Find a Job

Remain Positive.  It is easy to get discouraged.  Much of the job news is negative and the job search itself, even in the best economy, is full of rejection.  It is important to remember that companies are hiring, to the tune of approximately four million new workers per month. 

Join LinkedIn, Facebook, Twitter, et al.  More employers are seeking candidates and advertising positions through social and professional networking sites.  These sites also offer effective means of expanding one’s network.  It is critical to create a professional profile and remember that even status updates can be seen by potential employers.  Do not post anything that might eliminate you from the running.

Get involved with community service group.  This is a great way to build your network as well as hone your professional skills. 

Join a professional/trade association.  These organizations can provide training and education opportunities and most hold several networking functions every year.  The dues are worth their weight in gold if you meet a person at an event who can help you find a new job.

Meet 10 new people in your field but outside of your company.  Building these relationships may help you in your current position and they will definitely help when you enter the job market.

Rev up your skills.  Build upon your established skill set.  Explore online courses and local certificate programs to broaden your industry knowledge, increasing your marketability to a variety of employers.