Veteran Employment Situation Report – October 2016

Veteran Employment Situation Report
Issue 16-11
Friday, November 7, 2016
www.vetjobs.com

Welcome to the October 2016 VetJobs Veteran Employment Situation Report (VESR) covering veteran unemployment for SEPTEMBER 2016. The VESR is published on the Friday of the month when the Department of Labor (DOL) releases the unemployment reports which is generally the first Friday of the month.

This report is in four parts.

1. The first section will be an editorial providing a brief overview of the economy.

2. The second section covers specifically the employment situation of veterans.

3. The third section covers current labor metrics and the Department of Labor’s (DOL) Bureau of Labor Statistics (BLS) report on the labor market.

4. The fourth section covers where the new jobs were created and where one would currently have the best chance for finding employment.

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EMPLOYMENT SUMMARY

1. EDITORIAL OVERVIEW

The staff of VetJobs asks that you please keep those being affected by hurricane Matthew in your prayers. Contribute to a charity of your choice as the need for help once Matthew clears out will be substantial.

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Today’s Department of Labor (DOL) unemployment report is the last one before the election. The report will be cited by both parties as they try to hype their positions. The unemployment numbers that were released today reflects a weak economy – the numbers were not a favorable report.

The overall national unemployment rate rose marginally from 4.9% to 5.0%. The national veteran unemployment rate remained constant at 4.3%, 0.7% lower than the national unemployment rate. This again confirms that veterans are getting jobs at a better rate than non-veterans.

New job creation in America is stagnant for a whole host of reasons such as over regulation, high taxes, shortages of qualified labor, etc. Given the size of the American economy, the United States needs to be creating 200,000 to 250,000 new jobs a month. September saw only 156,000 new jobs created. Nonfarm job growth for 2016 has averaged 178,000 per month, compared with an average gain of 229,000 per month in 2015, again reflecting a declining economy. On average we are creating 51,000 less jobs per month in 2016 than in 2015. Not a good situation for those in the job market.

As an observer of labor trends, to me the real indicator of what is happening is the Labor Force Participation Rate (LFPR) which rose 0.1% from 62.8% in August to 62.9% in September. The LFPR is a reflection of those that could be working but are not.

A country cannot have a thriving economy when 37.1% of its workforce is not working. Someone has to pay for the individuals to eat, provide medical care and housing, none of which is free. The reality is nothing in life is free. Somebody, somewhere, eventually has to pay the bill!

The stock markets all reacted negatively on today’s report and opened down on the news that manufacturing, mining, education and other major sectors lost jobs. It will be fun to see how the political candidates try to spin today’s labor report. And see how many candidates stay close to the truth!

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America is definitely in the political season! This year’s presidential race is probably the most tumultuous since the 1820s. No matter whether you are on the left or the right, trying to find accurate facts about the economy during this time frame can sometimes be hard due to the politicization of almost everything. So let us take a look at the economy, both world and the United States, from a 30,000 foot view. From today’s labor report, things are not as rosy as some politicians are claiming. And driving a lot of America’s problem is debt.

The International Monetary Fund (IMF) warns that global debt has hit a record high of $152 trillion, weighing down economic growth and adding to risks that recovery could turn into stagnation or even recession. In a worst-case scenario the IMF also fears that a wave of populist politics across the US and Europe could send globalization into reverse with protectionist policies hitting international trade, investment and migration, sending the world plunging into a prolonged period of stagnation. The warning came after the IMF cut its growth forecasts for a series of countries around the world, leaving Britain the fastest growing economy in the G7.

The IMF downgraded its forecast for the United States economy estimating growth in 2016 at 1.6%, down from the 2.2% it predicted back in July and down from the 2.6% growth in 2015. Contrary to many politicians, the American economy is contracting.

“At 225% of world GDP, the global debt …is currently at an all-time high. Two-thirds, amounting to about $100 trillion, consists of liabilities of the private sector which can carry great risks when they reach excessive levels,” the IMF said in its fiscal monitor. “The sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery.”

This debt burden is mounting at a time when slow growth means inflation and interest rates will remain low, making it hard for companies, individuals and governments to earn their way out of debt. The IMG says a combination of low growth, high debt and weak banks could push the world in a dangerous financial and political direction.

I mention the above IMF report because the United States, as the world’s leading economy, has the same debt problem. Our current debt is 20 trillion and growing daily. It is an old axiom of business and banking that you cannot borrow your way out of debt. The more debt a country has, the weaker it becomes. America and the rest of the world is hooked on debt.

Complicating the economic picture in the United States is the number of announced layoffs by U.S.-based companies rose in September to the highest level in two months. This is from global outplacement consultancy Challenger, Gray & Christmas. Employers announced plans to cut 44,324 jobs last month, a 38% increase from August, when total job cuts of 32,2188 fell to lowest total since May. The good news on layoffs is that despite the monthly rise, September’s total was 25% below the announced job cuts a year ago.

The biggest job cutter last month was the education sector, rising by 363% to 8,671. Cuts in the computer industry in September totaled 4,152 jobs. The sector’s year-to-date layoffs were second only to the energy sector, which announced 98,733 cuts for the nine-month period. The report comes a day after ADP and Moody’s Analytics reported that companies in September created jobs at the slowest pace in six months. Again indicating that the American economy is still not recovered.

As I have mentioned before, employers are complaining that they cannot find enough “qualified” candidates to fill their jobs. What should be obvious to our politicians is that the skill sets required for jobs in the economy has changed but the skill sets of the labor force have not. As a result, America has a lot of people available to work, but not enough qualified people for the jobs available.

That is a systemic problem in our education system. Let’s hope our politicians wake up to the issue and start putting resources into channels that will qualify our workforce for available jobs.

Thank you for reading.

Ted Daywalt
President

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2. VETERAN UNEMPLOYMENT REPORT

General Summary from CPS Veterans Report

The BLS CPS report states there were 20,832,000 veterans left in the United States in August, down 25,000 from the 20,857,000 veterans in August. As I have said many times, since the Vietnam War the trend of veterans in the United States has continuously been decreasing. America has lost two-thirds of its veterans since the Vietnam War. This is an important issue for veterans as with decreasing numbers, they are losing the political power they had in the past. This is not lost on politicians running for office and may help explain problems at the Veterans Administration.

BLS CPS reports there were 10,622,000 (51.1%) veterans in the workforce in September. That represents an increase of 130,000 from the 10,522,000 (50.4%) veterans in the workforce in August.

461,000 (4.3%) veterans were unemployed in September, up 8,000 from the 453,000 (4.3%) veterans who were unemployed in August. 10,180,000 veterans were not in the workforce in September, a decrease from the 10,335,000 who were not in the workforce in August. This number shows there are a lot of veterans sitting on the sidelines and not participating in the workforce. This is also true of civilians where over 90 million are not participating in the workforce. In spite of what politicians may say, you cannot have a thriving economy with so many people not participating in the workforce.

The really good news continues to be that the overall veteran unemployment rate is still lower than the national unemployment rate. The fact that the veteran unemployment rate of 4.3% is lower than the national unemployment rate of 5.0% is great news for the veteran community. And again demonstrates that veterans are in high demand in the civilian work place. The September 4.3% veteran unemployment rate again confirms that veterans are obtaining employment at a better rate than nonveterans.

Younger Veterans

In September there were 215,000 veterans in the 18 to 24-year old cohort, down from 225,000 in August. Of those, 158,000 (73.6%) were in the civilian labor force, of which 146,000 (67.9%) were employed and 12,000 (7.7%) were unemployed. For comparison, the national 18 to 24-year old unemployment rate in September was 8.1% (1,222,000).

There were 1,749,000 veterans in the 25 to 34-year old veteran cohort in September, up 1,000 from August. Of this group, 1,381,000 (79.0%) were in the workforce of which 1,306,000 (74.7%) were employed and 75,000 (5.4%) were unemployed, a sharp decrease from the August rate of 6.6% (94,000). 368,000 were not in the workforce. For comparison, the national unemployment rate for the 25 to 34 year olds in August was 5.0% (1,786,000)

Older Veterans

The unemployment rates for the older veteran cohorts are as follows:

September                          August                           July
35 to 44 year olds    2.7% (54,000)           4.2% (83,000)             5.6% (110,000)
45 to 54 year olds    4.3% (120,0000       4.0% (113,000)           3.1% (85,000)
55 to 64 year olds    4.7% (114,000)          3.6% (83,000)            4.7% (111,000)
65 year olds and over 4.5% (85,000)      3.7% (71,000)             4.0% (76,000)

The above numbers indicate that older veterans in August and for the last three months found jobs at a better rate than non-veterans given that the national unemployment rate was 4.9% and is 5.0% for September. Most economists view unemployment rates of below 4.5% to 5.0% as just the normal churn of people moving between jobs. Some refer to it as natural unemployment. No matter what one calls it, the overall numbers for veteran unemployment are very strong when compared to their civilian counterparts.

It is heartening to see that the 35 to 44 year old veteran unemployment rate has consistently fallen the last three months. This is the age group when many leave active duty following a 20 year career and seek civilian employment. These statistics would mitigate they are finding work.

Women Veterans

There were 2,017,000 women veterans in September. 1,283,000 (63.6%) were in the civilian labor force of which 1,233,000 (61.1%) were employed, and 50,000 (3.9%) were unemployed, down 37,000 from the August women veterans unemployed of 87,000 (7.0%). 734,000 women veterans were not in the workforce in September. The national unemployment rate for women in September was 4.7% (3,456,000). These numbers confirm that women veterans are definitely getting jobs at a better rate than their civilian counterparts during September!

Gulf War II Veterans

There were 3,935,000 Gulf War II era veterans in September. 3,170,000 (80.5%) were in the workforce. Of those, 3,030,000 (77.0%) were employed and 139,000 (4.4%) were unemployed, down from the 147,000 (4.7%) in August. 766,000 Gulf War II era veterans were not in the labor force.

Black Veterans

There were 2,520,000 black veterans in September, of which 1,530,000 (60.7%) were in the civilian work force. 1,422,000 (56.4%) were employed and 108,000 (7.0%) were unemployed. The national Black unemployment rate in September was 8.0% (1,575,000).

As in the past, the national Black unemployment rate is higher than the Black veteran unemployment rate. These numbers confirm the advantages of minorities joining the military to obtain employment skills and work experience. From these numbers, the Black veterans are definitely finding jobs at a better rate than their Black civilian counterparts!

Asian Veterans

There were 316,000 Asian veterans in September of which 212,000 (67.2%) were in the workforce. 211,000 (67.2%) were employed and the number of unemployed was not statistically reportable. This is a statistical anomaly, but it does occasionally occur. Basically the Asian veteran unemployment rate is near zero percent. 103,000 were not in the labor force. The national Asian unemployment rate in September was 3.7% (356,000).

Hispanic Veterans

There were 1,504,000 Hispanic veterans in September of which 920,000 (61.2%) were in the workforce. 857,000 (57.0%) were employed and 63,000 (6.9%) were unemployed. 584,000 were not in the workforce. The national unemployment rate for Hispanics in September was 5.9% (1,572,000).

White Veterans

There were 17,406,000 White veterans in September of which 8,548,000 (49.1%) were in the workforce. 8,223,000 (467.2%) were employed and 324,000 (3.8%) were unemployed. 859,000 White veterans were not in the workforce. The national White unemployment rate in September was 4.0% (4,962,000).

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3. From the BLS

Erica L. Groshen, Commissioner of the Bureau of Labor Statistics reported this morning that Nonfarm payroll employment increased by 156,000 in September, and the unemployment rate was little changed at 5.0%. Job gains occurred in professional and business services and in health care. Thus far this year, nonfarm job growth has averaged 178,000 per month, compared with an average gain of 229,000 per month in 2015. Incorporating revisions for July and August, which reduced nonfarm payroll employment by 7,000 on net, monthly job gains have averaged 192,000 over the past 3 months.

Average hourly earnings of all employees on private nonfarm payrolls increased by 6 cents in September to $25.79. Over the past 12 months, average hourly earnings have risen by 2.6%. From August 2015 to August 2016, the Consumer Price Index for All Urban Consumers (CPI-U) increased by 1.1% (on a seasonally adjusted basis).

Turning to data from the survey of households, most major labor market measures continued to show little or no change in September. The unemployment rate, at 5.0%, and the number of unemployed people, at 7.9 million, were essentially unchanged over the month and have shown little net movement since August 2015.

Among the unemployed in September, 2.0 million, or 24.9%, had been searching for work for 27 weeks or more. The labor force participation rate, at 62.9%, and the employment-population ratio, at 59.8%, changed little over the month. Both measures have shown little movement in recent months, but were up by 0.5% point over the year.

Among the employed, 5.9 million worked part time for economic reasons in September, little different from August. (These involuntary part-time workers would prefer to work full time, but had their hours cut back or were unable to find full-time jobs.)

Among people who were neither working nor looking for work in September, 1.8 million were marginally attached to the labor force, about the same as a year earlier. Discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, numbered 553,000 in September, also about the same as a year earlier. (Marginally attached to the labor force refers to those who had not looked for work in the 4 weeks prior to the survey but wanted a job, were available for work, and had looked for a job within the last 12 months.)

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4. WHERE THE NEW JOBS WERE CREATED

For those people looking for work, the following paragraphs from the BLS commissioner’s report indicates where the new jobs were created. If you are looking for a job, these areas may offer employment opportunities.

Professional and business services employment rose by 67,000 in September and by 582,000 over the year. Within the industry, employment in management and technical consulting services increased by 16,000 over the month, and employment continued to trend up in administrative and support services
(+35,000).

Health care added 33,000 jobs in September, with gains in ambulatory health care services (+24,000) and hospitals (+7,000). Over the past 12 months, health care employment has grown by 445,000.

Employment continued to trend up in food services and drinking places (+30,000) in September. Over the year, this industry has added 300,000 jobs.

Employment also continued to trend up over the month in retail trade (+22,000) and was up by 317,000 over the year.

Mining employment was flat in September; the rate of job loss in the industry had been moderating in recent months.

Employment in other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, information, financial activities, and government, changed little over the month.

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Thank you for reading the VetJobs Veteran Employment Situation Report (VESR). If you have any questions, please contact Ted Daywalt at info@vetjobs.com or call 877-838-5627 (877-Vet-Jobs).
Should you know of others who may want this information, they can sign up for the report by sending an email request to contact@vetjobs.com. If you want to be removed, use the same email.

Ted Daywalt
President

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