Businesses Hiring New Workers? Not Just Yet
With a less than robust economy and sustained unemployment numbers well above 8% for the past 35 months, businesses are not inclined to hire new workers. Reasons for their caution include, an uncertain economy, lack of consumer confidence and a lack of belief that the U.S. Congress will address spending and taxes with the approach of 2013.
The United States Department of Labor Jobs Report which was released on June 1, 2012 showed that the economy added 69,000 jobs in May 2012. The additional jobs is the smallest gain in jobs in a year. For the 50 states this indicates an average of 1380 jobs added in each state. Of course this likely varies from state to state, and yet shows that businesses are still being cautious as they look to the future.
The newly added 69,000 jobs for May does nothing to keep up with the population growth in the U.S. Also, missing from the report is the Bureau of Labor Statistics (BLS) revisions downward of previously reported results. Add to this less than optimistic report the fact that the labor force participation rate is at its lowest in 30 years. The Economy needs to add between 100,00 and 150,000 jobs on a monthly basis to keep up with the nations population growth.
The Labor Force Participation rate is defined as, the percentage of potential workers working and or, the percentage of the working-age population that is employed or looking for work. The BLS numbers for the labor force participation rate are at 64.3% which translates to 88.4 million people not in the labor market. The Labor Force Participation rate needs to dramatically change in a positive manner over the next few years, and the economy needs to add approximately 13 million jobs to bring down the current 8.2% unemployment rate to a more manageable 6%.