The job market may get worse before it gets better, according to the latest Manpower survey of U.S. employers' hiring plans. For the first time since the survey started in 1962, the seasonally adjusted net employment outlook -- the number of firms hiring minus those firing workers -- turned negative.
A net -1% of firms expect to hire in the April through June period, down from 10% in the first quarter and 15% for the second quarter a year ago, on a seasonally adjusted basis, according to Manpower's quarterly survey. The previous low point was in 1982, when a net 1% of firms planned to hire in the third quarter. See related story on the jobless rate hitting 8.1% in February.
Manpower's survey of 31,800 U.S. companies measures the percentage of firms planning to hire minus those intending layoffs. Manpower doesn't measure the number of jobs. The survey's margin of error is +/- 0.55%.
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The previous low point for the non-seasonally-adjusted employment outlook was -1% in 1983's first quarter.
This shouldn't really be surprising considering the overall macro economic environment. GDP dropped 6.2% in the fourth quarter. In that report we learned that PCEs, gross private domestic investment and exports were down. Industrial production is down 10% from year ago levels. Unemployment is already at 8.1%. In short, this is a time when businesses will be cautious.
Now, the article says the last time the readings were this low was 1982 and 1983 for the non-seasonally adjusted number. Let's see what happened then:
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The article gives two possible dates for the previous record low. I'm going to assume the 1982 date is for seasonally adjusted data.
Using 1982 and assuming the worst reading of the data -- and assuming that 1982 and the current situation are sufficiently similar to warrant comparison -- we still have a ways to go on the employment front. However -- employment is a lagging indicator, meaning it starts to increase after there is a bit of a rebound. So assuming the worse case -- that we have a year to go before we see a bottom in employment -- we have at least one more quarter of seriously negative GDP news followed (hopefully) by a slowdown in the rate of GDP decline. In other words, we have a terrible first half and a not-so-bad second half. At least -- that's what we hope.
