5 Sectors Slowing Job Growth
|May 4th, 2012, 06:31 PM||#1 (permalink)|
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5 Sectors Slowing Job Growth
Though the unemployment rate fell to 8.1% in April, according to Friday’s data, experts say the outlook would be far rosier if it weren’t for a handful of sectors dragging down job growth.
According Bureau of Labor Statistics figures, employment rose by 115,000 last month, less than analysts expected, but they say many jobseekers will take little solace from those figures.
A survey from jobs website SimplyHired.com found hiring fell in all of the top 50 major metro areas last month with Cleveland and Akron, Grand Rapids and West Palm Beach recording double-digit drops. Gautam Godhwani, the site’s CEO, says there are three people for every one job listing in the U.S. Of course, some industries were hit by massive cuts at just a few companies. Bank of America, for instance, is in the midst of cutting 30,000 consumer banking and technology jobs over three years.
There are some signs of growth, however. The legal profession and the military proved to be two bright spots for hiring, according to SimplyHired.com, with postings in those sectors up 166% and 239% respectively on the year in April. And, as SmartMoney.com reported, there are other anomalies: The number of HR jobs seems to be rising faster than overall hiring.
Here are five job sectors that continue to weigh on the overall employment picture.
Department and big box stores
Retailers keep demanding higher productivity from existing workers while trimming staff to save costs — hence the increasingly unmanned numbers of cash registers. Stores also need less space and less staff working the floor, says Patrick O’Keefe, director of economic research at J.H. Cohn consultants in Roseland, N.J. In the five years before the 2008 recession, stores accounted for 13.6% of all private-sector jobs, according to the Bureau of Labor Statistics.
However, during the jobs recovery, which began in March 2010, the sector provided only 9% of the total private sector gains, partly due to online retailers eating into the business of bricks and mortar rivals. “The rise in e-tailing is a long-term trend, which has only accelerated,” O’Keefe says.
Department stores lost 33,800 jobs in March, but added 6,400 in April, according to the Labor Department. Clothing stores lost 1,300 last month. Still, Betsey Stevenson, assistant professor of business and public policy in The Wharton School at the University of Pennsylvania, says it’s too soon to say whether this downward trend will continue throughout 2012.
TV, movie and music jobs
Jobs in motion picture and recording have remained stagnant over the last three months, according to the Bureau of Labor Statistics. The slowdown in hiring is partly seasonal, as some of TV shows end their productions this time of year, says producer Jonathan Taplin, a member of the Academy of Motion Picture, Arts and Sciences. Digital music recording equipment like Pro Tools and Apple’s software package GarageBand, which was launched by Apple in 2004, have also replaced some studio jobs in the music industry, he says.
“Digital technology is pretty much killing the standalone recording studio business,” says Taplin, who is also director of the University of Southern California’s Annenberg Innovation Lab, an arts and media research group. “Every band has much higher quality tools on a Mac than we had with 24-track tape in the 1970s or even five years ago,” he says.
Hiring in the travel industry fell by 7.1% during April, according to jobs posting website SimplyHired.com. “This sharp decline in hiring so close to popular travel months is likely an attempt by airlines and other oil-reliant travel businesses to buffer the unavoidably high cost of oil,” Godhwani says.
Of course, there have been some high profile job cuts in the airline industry with American Airlines announcing that it will slash 13,000 jobs as it struggles with long-running bankruptcy proceedings. “Although job openings decreased from last month, this isn’t unusual for hiring during this time of year,” Godhwani says. On the upside, he says travel hiring may pick up as the summer season gets underway. The transportation industry also saw a 2.8% decline in April, which he says could be due to rising gas prices.
Amusement and gaming
The amusement and gaming industry may provide more entertainment than employment these days. Although the total number of jobs in leisure and hospitality rose by 12,000 in April, employment in amusement and gambling fell by 7,700 in April after dropping 3,700 in March, according to the Bureau of Labor Statistics. “The gambling industry is not showing much growth,” says Gregg Mulholland, analyst with Sageworks, a financial information company.
A spokeswoman for the American Gaming Association — which represents casinos and, therefore, only one-third of the amusement and gaming sector — says employment was largely flat year-on-year in 2011 at around 340,000. “Several properties are set to open this year, though, so I would expect an uptick in 2012,” she says.
Job postings for childcare services have steadily decreased since 2007, according to employment site Indeed.com. In April they fell by 1,000 after declining by 3,700 in April, according to the Bureau of Labor Statistics. With childcare costs increasing and income growth stagnant, more grandparents have stepped in to look after young children – roughly 40% to 60% of those living within 30 minutes of their grandchildren now provide some care, according to the National Association of Child Care Resource & Referral Agencies.
The Bureau of Labor Statistics says the industry is due a revival, however. It forecasts childcare will grow by 20% over the next decade as the number of children requiring care is expected to grow. Others are not so sure: Stevenson says it’s difficult to draw forecasts from a breakdown of jobs data, especially given Friday’s report and the uncertain economic outlook.
5 Sectors Slowing Job Growth - Yahoo! Finance