Jobless recoveries is an all-too-frequent phrase in our modern economy.  The 3.5% growth in 3rd quarter GDP is a bit misleading as the government poured money into the economy (cash for clunkers, first-time home buyer program, etc.).  The hiring trend continues to be abysmal as somewhat expected as it is a lagging indicator.

But is it becoming more of a lagging indicator?  This article from Commentary Magazine makes an observation I haven’t heard elsewhere (emphasis mine):

The underlying reason for increasingly jobless recoveries in recent decades can be found in Chart 5 of the New York Fed’s report. In the early 1980s, 51 percent of industries were undergoing structural change as opposed to merely cyclical change. By the 1990s, that percentage was 57. In 2003, it was fully 79 percent. It is undoubtedly even more now, six years later. The fact of the matter is that the microprocessor is remaking the economy from top to bottom—just as the steam engine did two centuries earlier—but it is doing so much faster. One result of this profound economic revolution is that productivity—the amount of output per unit of input—is rising quickly, and the largest input in most industries is labor. Thus the need to hire new workers as the economy begins to grow again is less and less urgent. It increasingly makes a lot more business sense to invest in new, highly productive equipment instead.

The author makes a good point regarding ever increasing productivity requirements.  My impromptu analysis of my business circle supports these requirements.  Many people talk of doing 2 –3 different jobs for their company…and the company expects this effort.  Clearly the present job market supports companies requiring this of their employees – jobs are scarce.

The ability to leverage technology to greatly increase productivity is an ominous development in the effort to recover from this deep recession.

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The epitome of optimism – a headline from abcnews.com:

Has the Recession Finally Ended?

I guess you could characterize this as “talking up” the economy.  Here is one paragraph from the article that made me laugh (emphasis mine):

Today also brought some positive news from the much-battered retail sector. For the first time in three months, retail sales in May rose, by 0.5 percent, according to the Commerce Department. The sales were pushed higher by increased demand for new cars and sales at gas stations. It was the largest increase since sales rose 1.7 percent in January following six straight monthly declines. While this is good news, part of the jump can be attributed to a recent spike in gas prices which isn’t helping average consumers.

“Sales at gas stations” is clearly the spike in prices as the last sentence states.  That would actually be working against consumers and the economy.  A .5% increase could clearly be nothing more than a spike in gas prices, couldn’t it?

My discussions with candidates has been fairly consistent – the economy is brutal and another spike in gas prices like last year would be a tremendous blow.  Telecommuting jobs will be in even higher demand if a significant gas price increase occurs.

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Hiring, that is, and it appears that it is going to be an even rougher road over the back half of 2009.  If you are in the recruiting, hiring, assessing business you are aware of this fact.  9.4% unemployment is remarkable.  From abcnews.com:

The percentage of people without jobs in this country is now at the highest point in nearly 26 years. Every month since January 2008 we have seen jobs disappear.

So far the economy has shed 6 million jobs since the recession started push (sic) employers to start handing out pink slips.

I’m still looking for the report that lists the number of jobs “saved” by the stimulus package.  I suspect I will have to wait a bit longer for that information.  But fear not, the bleeding does seem to be slowing down:

The Labor Department this morning announced that another 345,000 Americans lost their jobs last month, pushing the unemployment rate up from 8.9 percent in April. Economists had expected a loss of 550,000 jobs and the news that significantly less were lost initially shot the stock market up.

Again, more economists with an inaccurate prediction.  I dare say the economy is too dynamic, too multi-faceted for any one person to accurately predict…much like the weather.  Yet, here is a development for which I was unaware (emphasis mine):

The (EEOC) commission received an unprecedented 95,402 complaints during a 12-month period ending in October. That’s up 15 percent from the prior year. Of those, 24,582 are charges of age discrimination, a massive 29 percent increase.

I think most of us know that companies often use down markets to purge employees whether deserving or not.  A recessionary economy provides cover for companies to layoff workers from a protected class with less liability.  I’m not condoning the practice, just being brutally honest.

This uptick in complaints seems to support this unwritten business practice.  I think an aspect that the reporter did not address is the overall aging of the workforce.  If the Boomers are the majority of the workforce, there stands to reason that there will be a continued increase in age discrimination charges simply based on the numbers.  That data would have provided a needed context to the article.

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Isn’t this an old marketing trick – include “surprising,” “stunned,” or “unexpected” in a headline?  It seems to me that every time an economic report comes out, we are presented with one of these words to describe the data.

The latest example comes from cnnmoney.com today:

U.S. construction spending unexpectedly posted its biggest increase in eight months in April, advancing for a second straight month as the private sector put money into both residential and nonresidential projects, according to a government report on Monday.

Oh to be able to surprise a sales manager with an unexpectedly lower sales forecast!  If the experts are consistently surprised, what credentials do they have for being experts?

Anyway, I am hopeful that the economy is turning, but I have to question if this is too early of a read.  The GM bankruptcy is going to have seismic repercussions on unemployment which is a lagging indicator to start.

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The economy is not in good shape right now, but the economic reporting by the “mainstream” media is abysmal.  For instance, this article from CNNMoney.com shows the writer working hard to present the positive data are really being gloomy.

The opening sentence sets the table for the writer’s theme:

Stores and online merchants were busier this weekend than they were a year ago, according to figures out Sunday, but signs persist that holiday shopping will suffer in the weakest economic climate in decades.

Unfortunately, facts are stubborn things (my editing):

The National Retail Federation (NRF), an industry trade group, said shoppers spent $41 billion in the 4-day Thanksgiving weekend. The average shopper spent $372.57, up 7.2% from the $347.55 spent last year.

To underscore its caution, the NRF reiterated its forecast that 2008 holiday spending will rise just 2.2%, to $470.4 billion, the smallest gain in six years.

Online, initial results showed a 2% gain in combined Thanksgiving Day-Black Friday sales from last year, according to figures from research firm comScore released Sunday.

The article presents the good data with dark predictions.  This type of doomsday reporting bothers me.  I personally think it creates an unneeded panic amongst uninformed people.  If I didn’t know better, I would think these reporters are hoping for terrible economic news.

I often wonder what would happen if reporters just reported the news without injecting their own themes.  Perhaps consumers would be concerned, but not panicked about the economy.

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If you think of the obstacles that have been thrown at our economy over the past few years (oil prices, housing market, credit crunch, ongoing war, etc.), you start to appreciate just how resilient it is.

When you work in the recruiting space, you pay close attention to the economic trends, especially the leading indicators, since hiring is a lagging indicator.

This ERE.net post caught my attention as it deals with an insightful excerpt from Jonathan R. Hefferlin regarding the latest jobs report:

There is renewed economic clatter with unemployment up by 0.2 to 5.7%, like there was a couple of months ago when it rose from 5 to 5.5%. We know the real number is higher, not counting folks whose benefits ran out before then found a job (an estimated + 4 million), which makes the true figure closer around 8%.

Betcha didn’t know that government stats only count those who are currently collecting unemployment and looking – a reported 1.6 million last month. 570,000 more, forced into part time work against their will, aren’t counted.

For all these shortcomings, you could at least use the 5.7% as an indication, until recent months. The entire rise from 5% can be attributed to the extension of unemployment benefits by three months, earlier this year. Had this not happened, the number we have learned to watch and love would be still 5% or less, as folks who used to be dropped off the rolls after six months are still counted.

Clarification might be found in lost jobs – 85,000 a month in Q1 vs. a recessionary 180,000 rate in 2001; 59,000 during Q2, and only 51,000 jobs lost in July, which was the 1st month in eight previous numbers weren’t revised downward. So the economy, which grew at a 1.9% rate in Q2 (0.5% of that $78 billion in stimilus (sic) checks thru June) vs 1% in Q1, proved amazingly resilient to $4.50 gas, $5 diesel, the credit implosion, and housing bubble.

If the plunge in oil prices continues, coupled with a weak dollar and the surge in bargain repoed home buying, the employment picture should continue to show some signs of hope.

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You ever notice what a mixed bag of economic news we receive these days?  Here is one that caught my eye from CNNMoney.com (my editing):

The private sector gained 9,000 jobs in July, primarily among small businesses and the service sector, according to a report payroll manager ADP released Wednesday.

A consensus of economists surveyed by Briefing.com had expected a loss of 60,000 non-farm jobs.

Can you imagine if the “consensus of economists” bet on football games?  They would be making their predictions from the poor house.

Nonetheless, I heard a very interesting talk from John Sumser last week in which he discussed that national employment statistics are grossly overrated (my term).  His thesis is that economies are regional, even local (look for the “Mega-Region slide).  Weakness in one area (e.g. Detroit) is far different than growth in another area (e.g. Las Vegas).  Trying to combine these two into a national number is a statistic for national newspapers to use, but it truly does not have any application locally.

I couldn’t agree more.

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I’ve been reading through many sales employment ads recently and am seeing a trend – the ads are written tighter.  A couple of examples:

-Minimum of 5 years of related public accounting and/or corporate sales

-A minimum of two years’ business development experience in a pharmaceutical and/or CRO biotechnology, or drug development company.

Nothing wrong with this approach since the candidate pool is still relatively large due to the slow economy.  One thing to be sure of – the labor pool will tighten up again soon.  At that point, it is wiser to move these requirements into preferences and look outside of your industry for transferable skills.

One interesting point – the aforementioned examples are from companies that recently laid off numerous employees.  This is a common approach for large companies.  They tend to purge a certain number of employees during slow times.  Wall Street is more accepting of this news and it is a good time to upgrade certain positions.

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The Herman Trend Alert (sorry, no link) today highlights areas of the economy that are growing, even thriving, during the slowdown.  Some you may not have considered:

Logistics alternatives to diesel-consuming trucks that are more efficient at moving goods, like railroads, are also doing well. Plus, fed up with increasing delays and cancellations of flights, passengers are choosing rail travel over air. Expect this trend to increase; the US rail lines will borrow experts from Canadian Pacific and Virgin to learn how to deliver extraordinary passenger experiences.

Domestic food producers, especially domestic cheese producers are reaping the benefits of the falling dollar. Rapidly rising prices for imported products are prompting customers to look for domestic substitutes. Farmers now find their products in increasingly higher demand.

But then there is a dandy little comment that I have seen from many of our friends and neighbors:

Local amusement parks will also do well in these challenging economic times. The parks are enjoying the benefits of people taking what are called “staycations”—vacation time off taken close-to or at home. Until the economy improves, expect to see increasing numbers of people choosing staycations.

“Staycations” – that is excellent.  I am writing this post from the airport as I wait to interview a candidate.  I can tell you there are many people complaining about their travel prices as they walk by me.  The delays are another sore point as I sit here waiting for the candidate’s delayed flight.

If you sell into any of these industries, it is time to pick up the phone or fire off an email.  Their industry is surging which makes qualifying money an easier task.

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The doom-and-gloom economic reporting continues and as a sales manager it is important to keep a pulse on your team.  More articles are being released on the topic of employees getting skittish about their future with the company.  Bob Rosner offers some good advice for these employees in his Working Wounded blog:

Be careful to not drink the Kool-Aid with coworkers by being hyper-critical about your company’s future. Get an outside opinion. If you work for a public company, talk to a stock broker. A search in our city listed 391 brokers who offer a free consultation. If you work for a smaller company, check with vendors to see if they’re getting paid on time. Don’t stop there — also get a read on your department. Is your budget increasing? Do you work with vital customers? These are great check-ups to see if a layoff could be in your future.

…

Do you like, love or just plain hate your job? If you’re really unhappy, try information interviews with people on a career path that interests you. Passionate people enjoy sharing career tips with others. You could also obtain a skills and personality evaluation to determine your vital signs. Your work decision-making shouldn’t just revolve around your company or region’s vitality — it should reflect your passions too.

There will be plenty of salespeople jumping ship if they find a more secure opportunity.  Now is the time when sales managers have to secure their top talent before they drink the Kool-Aid.  Take the extra time to interact with your team and get a read of their present mindset.

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