Veteran Employment Situation Report

Veteran Employment Situation Report for April 2014
Issue 14-04 Friday, April 4, 2014

Welcome to the April VetJobs Veteran Employment Situation Report (VESR) covering March 2014. The VESR is published on the first Friday of the month when the Department of Labor releases the unemployment reports.

This report is in three parts with one article at the end.

-The first section will be an Employment Summary providing and overview of the Department of Labor’s (DOL) Bureau of Labor Statistics (BLS) report on the labor market.

-The second covers where the jobs were created, meaning at what type of job one would currently have the best chance for finding employment.

-The third covers the employment situation of veterans.

-The last article delineates the differences between CES and CPS unemployment reports.

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EMPLOYMENT SUMMARY

Overview

The unemployment numbers were released by Department of Labor (DOL) Bureau of Labor Statistics (BLS) this morning and the report again shows that the United States compared to the pre-recession period is still not back to work. BLS reported the March CES unemployment rate was 6.7%.

The unemployment rate has remained above 6.6% since the end of the last recession in 2007, which makes this recovery the worst recovery since World War II. Traditionally, since the 1980s, normal unemployment which reflects people changing jobs, retiring, etc., was 4.0%. While the government says the country is in a recovery, many economists maintain America is still in a recession and point to how the current unemployment rate continues to stay well above 4.0%. With the unemployment rate having remained so high for so long, I agree with those who maintain America is still in a recession or at least in an employment recession.

The Current Employment Statistics (CES) unemployment rate remained at 6.7% in March. At a time when the country needs to see the unemployment rate going down having a stagnant rate is bad news. Politicians and government bureaucrats will say the unemployment rate was basically unchanged, but that still does not alleviate fact that the unemployment rate is not going down. A big part of the reason the unemployment rate has remained so high is because so many people dropped out of the workforce. People dropping out of the workforce because there are no jobs is a bad thing for any economy.

March saw only 190,000 new jobs created. America needs to be generating 250,000 plus new jobs a month in order to create real economic growth and have jobs for the extremely high number of unemployed, now at 10,184,000, and have jobs for the new workers entering the economy seeking employment.

BLS reports the CES real unemployment is 12.7% when one adds the underemployed and those with part time jobs due to a shortage of full time jobs and is well above the normal unemployment of 4.0%. When one considers those workers who have been moved to 30 hours or less due to the American Care Act, it becomes readily apparent there are serious problems in the economy. Irrespective of the current lack of movement in the national unemployment numbers the March, the numbers needs to be going down, not sideways. The CES unemployment and the CPS total unemployment numbers for March again confirms that the United States economy is stagnant and is not in a growth mode.

The Current Population Survey (CPS) national unemployment rate for March dropped marginally to 6.6%, down from 6.9% in February. See the last article of this report for the differences between CES and CPS unemployment reports.

Household Survey

Turning to the survey of households, both the unemployment rate, at 6.7%, and the number of unemployed persons marginally fell to 10.184 million.

The labor force participation rate rose to 63.2% in March from 63.0% in February. This is a very important number as it shows that nearly 37% of the eligible workforce has dropped out. This is reflected in the sharp increases in unemployment and food stamp payments over the last six years. This is not a good record for our politicians and has exponentially increased the cost of government programs.

The employment-population ratio rose to 58.9% in March from the February rate of 58.8%. This number, like the labor force participation rate, is not a good sign. With people graduating from high school and college, and with people wanting to go to work, the number should change, but it has remained basically unchanged for over a year. This is very bad for the economy.

The bottom line from the above numbers is the United States economy is stagnant and not improving in any meaningful way. The United States economy is in trouble!

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WHERE THE NEW JOBS WERE CREATED

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

BLS Commissioner Erica L. Goshen reports that for March nonfarm payroll employment rose by 192,000 in March, and the unemployment rate was unchanged at 6.7%. Employment increased in professional and business services, in health care, and in mining and logging.

Incorporating the revisions for January and February, which increased total nonfarm employment by 37,000 on net, monthly job gains have averaged 178,000 over the past 3 months, which again is not enough for real growth. In the 12 months prior to March, employment growth averaged 183,000 per month.

It is very important to note that all of the net job growth in March occurred in the private sector which now has exceeded its employment level in December 2007, when the most recent recession began. The private sector lost 8.8 million jobs during the labor market downturn and has gained 8.9 million since the employment low in February 2010. This is big news.

The Government employment sector is down since the recession began (-535,000), and therefore total nonfarm employment remains below (-422,000) its December 2007 level. The Secretary basically confirms what every business person understands, that being real sustained job growth can only come from the private sector, not from the government sector. In the private sector job growth means companies making a profit and are self-supporting. In the government sector, job growth means more taxes from companies and individuals, thus reducing the amount of money in circulation to create real growth.

In March, employment in professional and business services rose (+57,000) in line with the prior 12-month average. Within the industry, temporary help services added 29,000 jobs in March. Employment growth in temporary help services had averaged 20,000 per month in the prior 12 months.

Health care employment rose by 19,000 in March, with gains in ambulatory health care services (which includes home health care and outpatient care centers). The Secretary reports that in the prior 12 months, job growth in health care had averaged 17,000 per month, with most of the growth occurring in ambulatory care. In March, nursing care facilities lost 5,000 jobs.

Employment in mining and logging rose by 7,000 in March, led by gains in support activities for mining (+5,000). Mining and logging has added 38,000 jobs over the year.

Employment in food services and drinking places continued to trend up in March (+30,000). This industry has added 323,000 jobs over the year.

Employment continued to trend up in construction in March (+19,000) and is up by 151,000 over the past 12 months. This is a critical number due to all the spin off jobs in the private sector that construction creates.

Employment in other major industries, including manufacturing, wholesale trade, and retail trade, changed little in March.

WAGES

Average hourly earnings of all employees on private nonfarm payrolls edged lower by 1 cent in March, after rising by 9 cents in February. This is not good for wage improvement. Over the past 12 months, average hourly earnings have risen by 2.1%. From February 2013 to February 2014, the Consumer Price Index for All Urban Consumers (CPI-U) rose by 1.1%.

In March, the average workweek for all employees on private nonfarm payrolls increased to 34.5 hours, offsetting a net decline over the prior 3 months.

HOUSEHOLD SURVEY

Turning to the survey of households, the unemployment rate, at 6.7% percent, was unchanged in March, and the number of unemployed fell marginally to 10,184 million from 10.5 million.

The number of unemployed persons who had been jobless for 27 weeks or more was little changed (3.7 million). These individuals accounted for 35.8 percent of the unemployed.

Both the civilian labor force and total employment increased in March. The labor force participation rate (63.2%) and the employment-population ratio (58.9%) changed little over the month. The labor force participation rate has been the lowest in decades and reflects the workers frustration with the lack of new job creation.

Among persons who were neither working nor looking for work in March, 2.2 million were classified as marginally attached to the labor force, little changed from a year earlier. (These individuals 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.) The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, edged down over the year to 698,000 in March.

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VETERAN UNEMPLOYMENT REPORT

General Summary from CPS Veterans Report

The BLS CPS report states there were 21,266,000 in March, down 32,000 from the February number of 21,298,000. At the end of the Vietnam War there were nearly sixty million veterans in America. The United States has lost two thirds of its veterans.

BLS CPS reports there were 10,972,000 veterans in the workforce in March up from the 10,833,000 veterans in the workforce in February, an increase of 139,000. This number is expected to increase over the next six months with the rapid disarming of the country by the current administration. The Army, Navy, Air Force and Marine Corps are being slashed to a force about the size of pre-World War II numbers. The increase indicates again that veterans are finding jobs at a better rate than nonveterans.

For those students of history, when the United States disarmed in the 1930s Germany invaded the Sudetenland, a term used by Germany to refer to those northern, southwest, and western areas of Czechoslovakia which were inhabited mostly by German speakers, specifically the border districts of Bohemia, Moravia and those parts of Silesia located within Czechoslovakia. At the same time the Japanese invaded Manchuria. The Germans and the Japanese felt they could make these moves since the United States had disarmed during the 1930s. There are many parallels to what is happening in the world today. The results of America disarming will have major impacts on the world stage. For veteran unemployment, it will cause an increase until all those military personnel who are being put out of the service can find jobs.

The CPS unemployment rate for all veterans in March fell to 6.0%, down from the February rate of 6.3%. The CES unemployment rate for all veterans fell to 6.0%. Both of these rates again confirm that veterans are finding employment at a better rate than nonveterans since the national CES unemployment rate is 6.7%!

The total number of veterans unemployed in March was 650,000, down from the February number of 684,000, an increase of 34,000. This increase will continue for several months as the administration continues to reduce the size of the active duty forces from the 1.1 million to a projected 780,000. It should be noted that this is not a hard number as it has changed several times. When the downsizing is completed by the administration, the National Guard and Reserve will be the majority of the United States fighting force.

Younger Veterans

The area where there has been much press coverage over the last seven years since the current call up policy was implemented on January 11, 2007 has been in the 18 to 24 year old group and the 25 to 29 year old group which make up a large part of the National Guard and Reserve (NG&R). With the current downsizing of the active duty forces, the NG&R are approaching nearly 60% of the total fighting force. Shifts in unemployment in the NG&R will significantly affect the overall veteran unemployment rate. A challenge for the NG&R is finding jobs. They have been called up so many times many employers shy away from hiring members of the NG&R. Historically, when the active military is downsized, the use of the NG&R increases.

The unemployment rate for the 18 to 24 year old veterans in March fell to 14.6% (21,000), down from the February number of 16.6% (24,000), a decrease of 3,000. There are 61,000 18 to 24 year old veterans not in the labor force who are probably in school or technical training/college programs, may be disabled and unable to work or just decided to not go into the workforce. The unemployment rate for the 25 to 29 year old veterans in March fell to 7.7% (39,000) a significant decrease from the February rate of 18.8% (98,000)!

For comparison, the CPS overall unemployment rate for all 18 to 24 year olds (veterans and nonveterans) in March fell to 13.8% (2,649,000) from the February rate of 14.3% (2,679,000). The CPS unemployment rate for all 25 to 29 year olds in March fell to 7.5% (1,275,000), down from the February rate of 8.1% (1,378,000).

These numbers may improve since the DOL Office of Federal Contract Compliance Program (OFCCP) has set an audit benchmark (some call that a quota) for all companies subject to OFCCP to have a minimum of 8.0% of their workforce be veterans and 7% be individuals with disability (IWD). Basically, that is any company over 50 employees and any non-profit with a federal government contract. It is interesting to note that if one looks at all the jobs and employers subject to OFCCP, there appears there are not enough veterans in the workforce for each company to have 8.0% of their work force be veterans! It should also be noted that employers do not hire to quotas, which in essence is what the benchmark represents. Employers hire to needed skill sets, not benchmarks.

Due to the poor economy of the last six years there have been veterans who were having problems finding work for a variety of reasons unique to military service, mostly disabilities acquired while on active duty. With the addition of veterans from the downsizing, the competition for jobs for these two cohorts will become very fierce. Concurrently, there is fierce competition developing by companies seeking to hire qualified veterans due to OFCCP.

Older Veterans

Of the 650,000 veterans unemployed in March, 531,000 were over the age of 30. The unemployment rates for the older veteran cohorts are as follows:

March February
30 to 34 year olds 5.3% (49,000) 7.0% (61,000)
35 to 39 year olds 7.4% (70,000) 5.9% (56,000)
40 to 44 year olds 5.7% (67,000) 4.7% (56,000)
45 to 49 year olds 5.4% (49,000) 5.1% (65,000)
50 to 54 year olds 6.6% (99,000) 6.3% (94,000)
55 to 59 year olds 6.3% (88,000) 5.2% (70,000)
60 to 64 year olds 5.9% (69,000) 7.8% (92,000)
65 year olds and over 4.3% (80,000) 3.6% (68,000)

The 30 to 34 year olds and the 60 to 65 year olds had significant improvements in March!

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CES versus CPS

A number of people have asked about the difference between the CES and the CPS unemployment reports. There has been a lot of confusion in the press regarding veteran unemployment rates because there are two unemployment reports generated by the Bureau of Labor Statistics (BLS) and many press reports do not specify which unemployment rate they are using.

One is the Current Employment Statistics (CES), also referred to as the Current Employer Survey, which is a survey of mostly large companies and government agencies reports on hires and layoffs to determine how many jobs were added or lost each month. The CES does not have a good representation of small businesses which is where most new jobs are created.

The second report is the Current Population Survey (CPS), frequently referred to as the Household Survey. The CPS is a joint effort between the BLS and the Census Bureau. The CPS picks up hiring by companies of all sizes, new companies, farm workers and the self-employed who are not included in the CES. The CPS has been shown to be more reliable and does a better job of picking up the shift in hiring because it includes small business hiring which is where most new jobs are created.

For the most part, I use CPS data instead of CES data.
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Thank you for reading the March VetJobs Veteran Employment Situation Report (VESR) covering February 2014. 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.

Ted Daywalt
President

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