ADP Estimates Companies in U.S. Added 42,000 Jobs
ADP Estimates U.S. Companies Added 42,000 Jobs in July
Andrew Harrer/Bloomberg
Jasmine Harrison looks through Fairfax County Public School applications at a job opportunity fair in Washington, D.C.
Jasmine Harrison looks through Fairfax County Public School applications at a job opportunity fair in Washington, D.C. Photographer: Andrew Harrer/Bloomberg
Aug. 5 (Bloomberg) -- Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, talks with Bloomberg's Rishaad Salamat about the outlook for the U.S. economy and housing market. Consumer spending, pending home sales and factory orders were all weaker than projected in June, showing the U.S. recovery lost momentum heading into the second half of the year as employment stagnates. Household purchases, which account for about 70 percent of the economy, were unchanged from May, according to figures from the Commerce Department issued Aug. 3 in Washington. (Source: Bloomberg)
Aug. 4 (Bloomberg) -- Companies in the U.S. added 42,000 workers in July, more than forecast, according to figures released by ADP Employer Services. Bloomberg's Michael McKee reports. (Source: Bloomberg)
Aug. 4 (Bloomberg) -- Peter Dixon, global equities economist at Commerzbank AG, talks about the outlook for employment in the U.S. and the prospects for slower economic growth in the second half. Dixon speaks with Andrea Catherwood on Bloomberg Television's "The Pulse." (Source: Bloomberg)
To understand the potential consequences of long-term unemployment, consider the job prospects of Sheldon Fisher and Douglas Lawson.
In January, Fisher, 53, was dismissed from a software company in Washington State. Lawson, 34, lost his job in October with a builder in South Carolina.
Now the technology industry is bouncing back while construction remains in the dumps, and Washington’s jobless rate is 8.9 percent, vs. South Carolina’s 10.7 percent. Lawson’s prospects may be better than Fisher’s.
That’s because being jobless for a long time hurts workers in some industries far more than in others. The technology sector is known for such rapid change that those out of work for even a few months can find themselves with out-of-date skills. Construction skills are far less likely to grow stale.
“I never forget what I know,” says Lawson, who has applied for about 30 jobs so far. “I’m not worried about doing the work once I get it.”
Fisher, by contrast, is considering leaving information technology altogether, though he says he’s not sure what else he’s qualified to do. After applying for about 100 jobs in his first half-year out of work, Fisher began to worry that employers might think he was getting rusty.
Making it Worse
“Then everything after six months just makes it worse,” he says. The average duration of unemployment in the U.S. jumped to a record 35.2 weeks in June, up from 16.5 weeks when the recession began in December 2007, according to the Labor Dept. Today, roughly half of unemployed Americans have been out of work for 27 weeks or more (the official definition of long-term unemployment), vs. 30 percent in June 2009.
Industries with highly perishable skill sets include health-care technology, telecommunications, and finance, where regulations have changed dramatically in the past year. The toughest, though, may be information technology. Companies in that sector have cut payrolls for 32 of the last 33 months, through June, for a cumulative loss of some 312,000 jobs, or about 10 percent.
In technology, “if you’ve been out of work for a year or two, you’re probably somewhat outdated,” says Shami Khorana, president of HCL America, the U.S. arm of New Delhi-based HCL Technologies Ltd., which employs about 5,000 workers in the U.S. He plans to hire at least an additional 600 people as the economy improves and anticipates retraining some candidates with obsolete skills.
Unemployed workers in construction, retail, low-level health-care jobs, and teaching are more likely to be attractive to employers once hiring picks up because such jobs don’t change as quickly, experts say.
New Skills
“You don’t get the sense that residential construction has changed that much in the past decade,” says Harry J. Holzer, an economist at Georgetown University and the Urban Institute in Washington.
The skills needed to work at a grocery or clothing store -- running the cash register, for instance -- are “rudimentary,” he says. There are downsides to switching careers, because doing so can push workers into fields where their training isn’t valuable, creating a less skilled workforce, says Daniel S. Hamermesh, a former Labor Department official who is now an economist at the University of Texas.
“It’s tremendously difficult (for workers) to decide when the skill is no longer valuable,” he says.
When employers start hiring, they’ll want to see prospective employees who have done more than pump out résumés trying to find a new job.
Accenture Plc, for example, will want to see “how the applicants used their time” to stay marketable, says Catherine S. Farley, a Seattle-based managing director at the consulting firm. “Did that person do something to keep their skills fresh?”
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net; Zachary Tracer in New York at ztracer@bloomberg.net.
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