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Things To Watch In 2016: Steady Economy Is The New Hot

Things To Watch In 2016: Steady Economy Is The New Hot

By Kevin G. Hall, McClatchy Washington Bureau (TNS)

WASHINGTON — After a year free from government shutdowns and other self-inflicted wounds, the U.S. economy in 2016 is expected to power forward at a steady, albeit unspectacular pace.

Given all the global uncertainty, steady is the new strong. A six-year U.S. economic expansion, long by historical standards, rolls on.

Japan remains in the doldrums, China’s growth has slowed precipitously and emerging markets such as Brazil and Mexico are boiling over with internal discontent. Even next door the Canadian dollar is slumping badly against the U.S. greenback.

Here are three things worth watching in the U.S. economy in 2016:

GROWTH’S GEAR SHIFT

Since the economic recovery began in mid-2009, it’s been led by exports and the energy sector. That’s a trend now in reversal.

“The consumption side is picking up. The domestic-driven parts of our economy are strengthening and we’re likely to see an economy that is led less by production and more by consumption,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, N.C.

Mainstream economists project 2016’s annual growth rate in the ballpark of 2.5 percent, about the same as 2015.

“But beneath the surface, there really is quite a bit of change,” said Vitner.

Here’s why.

Amid the Great Recession, the U.S. dollar weakened against global currencies, making U.S. goods and services cheaper, particularly farm and ranch products. Exports boomed, as did employment in manufacturing and other export sectors.

Now much of the world economy is in slow-growth mode. The U.S. dollar has strengthened against European and Asian currencies. It’s meant a 4.3 percent drop in exports for the first 10 months of this year, according to the Census Bureau.

Similarly, when oil prices were over $100 a barrel in the prior decade it set in motion a massive wave of drilling for oil and natural gas. U.S. production reached record levels in 2014, and the energy sector hired like mad.

The expansion added to a global oil glut and ultimately a collapse in energy prices. Americans now enjoy gasoline priced below $2 a gallon in much of the nation. Since a peak in December 2014, employment in mining — the category under which oil drilling and related services fall — has dropped sharply. The Labor Department estimates more than 123,000 jobs lost in the sector since the peak.

Those two troubling trends, however, are offset by the growth shift.

JOBS, JOBS, JOBS

The economy is in a virtuous cycle, where hiring brings more sales and thus more hiring.

“The improvement in employment conditions … has occurred amid continued expansion in economic activity,” Federal Reserve Chair Janet Yellen said in a Dec. 17 news conference.

The unemployment rate was 5 percent in November, down sixth-tenths of a percentage point since December 2014. It’s projected by Yellen to go even lower next year. Although wage growth has been muted throughout much of the recovery, it has gained steam since summertime.

Two signs to watch in the job market are an easing of the still-elevated number of people reporting involuntary part-time employment, and a return to more typical rates of labor force participation.

HOUSING LIFTOFF

Sales of new and existing homes accelerated in 2015 and are expected to keep growing in 2016.

Surveys of lenders continue to show that credit is becoming more available for homeowners, aided by new jobs for millions more people now working, particularly in robust state economies such as populous California.

“They’re all adding income to families or single individuals, who are now able to go out on their own instead of living in their parents’ basement,” said Lawrence Yun, chief economist for the National Association of Realtors.

©2015 McClatchy Washington Bureau. Distributed by Tribune Content Agency, LLC.

Photo: Philip Taylor via Flickr

 

Getting Started: New College Grads Entering A Strong Job Market

Getting Started: New College Grads Entering A Strong Job Market

By Carolyn Bigda, Chicago Tribune (TNS)

This spring, students graduating from college will have more to look forward to than the end of exams and term papers. They can also expect a strong job market.

According to a survey by the Collegiate Employment Research Institute at Michigan State University, hiring of new grads is expected to jump 15 percent this year. The survey, which asked employers about their recruitment plans for the 2015-16 academic year, is based on responses from more than 4,730 firms.

“We’re seeing hiring rates that resemble the really strong job markets of past years,” said Philip Gardner, director of the Collegiate Employment Research Institute. He noted that hiring has improved annually since the 2010-11 school year, but that recruitment has really ramped up in the last three years.

“We’ve needed it,” Gardner said, pointing out that hiring must increase by 5 percent to 7 percent annually, “just to soak up new grads, never mind the students who graduated during the recession and may still be looking for suitable work.”

If you’re preparing to graduate in the spring, here’s what to expect.

Hiring is up throughout the country.

“There’s not one region that’s lagging,” Gardner said.

However, in some areas recruitment is off the charts. So-called super hirers — companies that plan to increase their hiring by more than 100 percent — are mostly in Virginia and California, followed by Michigan, Wisconsin and Texas.

“California and the D.C. metro area are home to power players in the job market right now,” Gardner said, such as technology firms, and companies in the aerospace, consulting and manufacturing industries.

Most sectors are hiring. In most cases, it doesn’t matter what career you want to pursue. Job growth is strong across industries too.

Take construction. In the aftermath of the 2007-09 recession, jobs for recent graduates all but disappeared in construction. But this year, hiring of grads with an associate’s degree is expected to climb by 37 percent in the industry. For graduates with a bachelor’s degree, recruitment is projected to jump 19 percent.

Other industries that could experience big hiring gains include automotive, health care, technology and professional services, such as accounting and marketing.

“One of the best pieces of news is that everyone is benefiting from the stronger job market, with the exception of big banks that are still sorting things out after the financial crisis,” Gardner said. “There’s not just one sector that’s going crazy.”

Still, while it will likely be easier to find a job this year, don’t expect to earn a fatter paycheck than last year’s college graduates.

According to CERI, 61 percent of companies plan to keep starting salaries at the same level as last year. Among employers that will raise wages, the median increase will be 3 percent.

Another 7 percent of companies will offer signing bonuses. Before the recession, 17 percent offered such bonuses to new college graduates.

“I’m surprised there’s not more wage pressure because competition for good job candidates is getting tough,” Gardner said. “But it’s just not there yet.”

Internships are key. Recruitment on college campuses is already in full swing, but internships are still one of the best paths to landing a gig after graduation.

According to CERI, 96 percent of employers use their internship programs, along with summer and co-op jobs, as a source for finding new hires.

“Building an internship pool is still a top strategy for companies, big or small,” Gardner said. “So if you’re a student and you haven’t done an internship, summer job or co-op (job) yet, it’s time to get on it.”

ABOUT THE WRITER

Carolyn Bigda writes Getting Started for the Chicago Tribune. yourmoney@tribune.com.

©2015 Chicago Tribune. Distributed by Tribune Content Agency, LLC.

Photo: Visha Angelova via Flickr

 

Is Jimmy John’s Bullying Workers With Non-Compete Agreements?

Is Jimmy John’s Bullying Workers With Non-Compete Agreements?

According to legend, it happened because he didn’t want to leave the gaming table. Maybe he was riding a hot streak.

Whatever the reason, he couldn’t be bothered with going to eat, so he told his servants to bring him a piece of meat between two slices of bread instead. Thus was gastronomic history casually made by John Montagu, an 18th-century British statesman and the 4th Earl of Sandwich.

In the centuries since Montagu inadvertently invented it, the sandwich has made many strides. Peanut butter came along in 1890, sliced bread in 1930. Dagwood Bumstead, who first conceived of the sandwich as a high-rise structure, was born that same year.

But Jimmy John’s, a sandwich maker with 2,000 outlets in 43 states and the District of Columbia, has come up with the greatest advance in sandwich tech since Montagu himself. It must have. Why else would it require its frontline workers to sign non-compete agreements as a condition of employment?

That’s the kind of contract typically required of the high-ranking executive whose annual compensation could retire the debt of a developing nation. It’s not something one would expect to be required of a kid working after school or a downsized mother trying to keep the lights on, making and delivering sandwiches for the somewhat more modest wages for which fast-food jobs are famous.

As reported by the Huffington Post, the contract says that for two years after leaving Jimmy John’s, the employee “will not have any direct or indirect interest in or perform services for any business which derives more than 10 percent of its revenue from selling submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches” and which is located within three miles of any Jimmy John’s.

On the face of it, it seems the kind of callous, arrogant, mean-spirited corporate mistreatment of low-wage workers that low-wage workers complain about all the time. But we know low-wage workers are not to be trusted, right? If they were trustworthy, wouldn’t they be making more money? That’s just logic. Don’t you watch Fox? Besides, corporations are people, my friend — a great man once said that — and decent people don’t treat other people that way, so what looks like petty bullying of vulnerable workers must actually be an attempt to protect some new sandwich innovation those workers are privy to.

I’m thinking: crumbless bread. Or a new kind of relish that promotes weight loss. Or maybe they’re about to unveil a creative menu where customers are no longer stuck with the same dull options they have at Subway. Maybe chunky penguin salad on rye?

Senator Al Franken (D-MN) is not persuaded by that logic. He’s co-sponsored a bill to end the practice of requiring low-wage workers to sign these agreements. I called his office for comment and received a written statement decrying what Franken called an “unfair practice” which erects “hurdles and barriers” and robs low-wage workers of mobility.

I knew he had to be mistaken, so I contacted Jimmy John’s to hear how this policy is actually needed to protect corporate secrets. A person who declined to be identified by name wrote that the company does not “currently” require its workers to sign non-compete agreements.

Obviously, that was a typo. Obviously, what the person meant is that Jimmy John’s “does not, never has and never would” do such a thing, unless, of course, it was necessary to protect privileged information. Otherwise, it’s just petty tyranny and as we all know, no American corporation would behave like that.

I emailed Jimmy John’s for clarification. I’m still waiting, but I’m sure they’ll get back to me any minute.

Meantime, who’s up for lunch? Dibs on the penguin salad.

—

(Leonard Pitts is a columnist for The Miami Herald, 1 Herald Plaza, Miami, FL, 33132. Readers may contact him via email at lpitts@miamiherald.com.)

Photo: Nate Grigg via Flickr

Job Market For College Graduates Gains, But Not To Pre-Recession Levels

Job Market For College Graduates Gains, But Not To Pre-Recession Levels

By Robert Gebelhoff, Milwaukee Journal Sentinel (TNS)

MILWAUKEE — For Jack Lawinger, a senior studying engineering at Marquette University, the leap from graduation to his career will be an easy one.

He already has a job lined up at Accenture, an international consulting and technology services company, where he will be doing technical work ranging from mechanical engineering to computer software.

“It takes a little bit of the pressure off for senior year,” Lawinger said. “There’s a little bit of relief, but I’m mostly excited.”

Lawinger and his friends in the engineering program are part of a group of college graduates expected to be in high demand leaving college, and they are also part of a graduating class entering an economy with relatively positive hiring outlooks.

As the economy continues to grow, surveys show employers will be looking at new degree holders to fill positions. Schools are also reporting an increase in recruiting on campuses this year.

“The jobs are everywhere,” said Joanna Patterson, director of career education at Alverno College in Milwaukee. “We need to send students the message that if they do what they need to, something is going to happen.”

The National Association for Colleges and Employers said U.S. employers are planning to hire 9.6 percent more college graduates this year than they did last year. The group also reported that nearly two-thirds of employers were planning to increase starting salaries for bachelor’s degree recipients, which was an average of $48,700 for the Class of 2014.

“Most of the people I’m graduating with have full-time jobs or had opportunities,” said James Ward, a senior at Marquette who has a job lined up at the accounting firm PricewaterhouseCoopers.

Still, the optimism is tempered by the fact that job opportunities for graduates today are nowhere near pre-recession levels. Ward, whose degree in finance means he is entering a field with growing demand from employers, said his friends graduating with humanities degrees still are having difficulty finding jobs.

“For some, the career path is not as clear-cut,” Ward said. “A lot of people still can’t get jobs without going to grad school.”

Before 2009, the unemployment rate was around 5.5 percent for new bachelor’s degree holders ages 21 to 24. That number nearly doubled in 2010 and fell to around 8 percent for last year’s graduates. The average job search for students still is expected to take six months or more.

“The economy has a long way left to go,” said Rebekah Pryor Pare, director of the Career Initiative in the University of Wisconsin-Madison’s College of Letters and Science.

So despite recent improvements in labor markets, the growth hasn’t yet been broad enough or strong enough to reverse the trends contributing to the “boomerang generation” of graduates, who are ending up back where they started before heading off to college.

Pare said one in five of her school’s students is moving back home with parents, often because paying off student debt is too costly for students living on their own. “Parents are helping out students a lot more now,” she said. “This is a real challenge for (families).”

Pare attributed the tough labor market to rapid changes in technology and a shift to a global market, jolting employers’ demands for skills in the college-educated workforce.

The National Association for Colleges and Employers said the most heavily sought graduates will have degrees in finance, accounting and computer science.

(c)2015 Milwaukee Journal Sentinel, Distributed by Tribune Content Agency, LLC.

AFP Photo/Justin Sullivan