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LifeWork Search Quarterly Economic Analysis, 2015 Q3

 

Q3 Economic Insights

Q3 has taken us on quite the bumpy ride.  In August we experienced historic drops in the stock market, (two 500+ point drops in one week!), and while the Dow has improved, the economy only grew 1.5% in Q3, down from the 3.9% growth in Q2. 

As a result of the recent turmoil in the financial market, many feel employers are temporarily holding off on hiring.  According to Fortune, job growth for all of 2015 is still hovering around 200,000 per month, which is quite strong. However, the source explained that the data should give pause to anyone hoping to claim that the U.S. economy has reached escape velocity.  The New York Times added that the uncertainty caused by the July-September job reports will likely inspire the Federal Reserve to hold off on increasing interest rates until next year, though earlier in 2015 they were expected to go up in the fall.

As far as the unemployment rate, no big drops in Q3, September’s unemployment rate remained unchanged at 5.1%.   Yet, with unemployment at 5+%, companies are still struggling to find top talent, and it is no different in the realm of Supply Chain.  Here are some reasons why supply chain professionals are becoming harder to find:

  • Unemployment rate for those with a bachelor’s degree or higher (age 25+) is only 2.5%.
  • There is a skills gap.  With the advent of “big data” and the increasing amount of data to crunch, being analytical is quickly becoming the most sought after skill for supply chain professionals.  That doesn’t mean you no longer need the outgoing personality to be able to interact and communicate with other departments within an organization, you now need both – which used to be unique to just planning. 
  • Although improving, university programs are geared more towards logistics, transportation and operations, rather than offering programs that better prepare supply chain professionals to manipulate data.  We’re seeing the latter more Master’s programs and higher.
  • 10,000 baby boomers become retirement eligible daily.  As a result, we’re going to see increased interest in contract staffing the next few years due to the lack of “bench strength”. 


Unemployement Rate

 

 

Jobs Added


 

Below is a summary of the BLS numbers for the Retail, Manufacturing, and Transportation / Warehousing industries for Q3 of 2015.  We have also highlighted the ISM (Institute of Supply Management) numbers.  According to the ISM’s report, economic activity in the manufacturing sector expanded in March for the 33rd consecutive month, and the overall economy grew for the 76th consecutive month.

 

Retail

       
 

Jun-15

Jul-15

Aug-15

Sep-15

Employment

15.67M

15.70M

15.70M

15.72M

Unemployment

6.1%

6.2%

5.4%

5.6%

Job Openings

539,000

676,000

651,000

-

Manufacturing

       
 

Jun-15

Jul-15

Aug-15

Sep-15

Employment

12.33M

12.34M

12.33M

12.32M

Unemployment

3.9%

4.3%

4.0%

4.1%

Job Openings

302,000

388,000

336,000

-

Transportation & Warehousing

     
 

Jun-15

Jul-15

Aug-15

Sep-15

Employment

4.77M

4.79M

4.79M

4.80M

Unemployment

4.8%

5.7%

4.4%

4.0%

Unemployment by Education

     
 

Jun-15

Jul-15

Aug-15

Sep-15

Less than high school

8.2%

8.3%

7.7%

7.9%

High school graduate

5.4%

5.5%

5.5%

5.2%

Some college

4.2%

4.4%

4.4%

4.3%

Bachelor's degree & higher

2.5%

2.6%

2.5%

2.5%

 

 

MANUFACTURING AT A GLANCE
SEPTEMBER 2015



Index

Series
Index
Sep

Series
Index
Aug

Percentage
Point
Change



Direction

Rate
of
Change


Trend*
(Months)

PMI®

50.2

51.1

-0.9

Growing

Slower

33

New Orders

50.1

51.7

-1.6

Growing

Slower

34

Production

51.8

53.6

-1.8

Growing

Slower

37

Employment

50.5

51.4

-0.7

Growing

Slower

5

Supplier Deliveries

50.2

50.7

-0.5

Slowing

Slower

2

Inventories

48.5

48.5

 0

Contracting

Same

3

Customers' Inventories

54.5

53.0

+1.5

Too High

Faster

2

Prices

38.0

39.0

-1.0

Decreasing

Faster

11

Backlog of Orders

41.5

46.5

-5.0

Contracting

Faster

4

Exports

46.5

46.5

 0

Contracting

Same

4

Imports

50.5

51.5

-1.0

Growing

Slower

32

OVERALL ECONOMY

Growing

Slower

76

Manufacturing Sector

Growing

Slower

33

Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries indexes.

*Number of months moving in current direction.

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