Cautious optimism prevails surrounding the job market for 2014. The Labor Department releases the December employment report Friday morning. It will help set the stage for what develops in the months ahead. Here are some key trends worth watching, whether you are holding down a job, thinking about a change or currently unemployed.
- The job market is getting closer to "normal." The number of jobs added last year averaged close to 200,000 a month. This year, hiring is expected to continue to accelerate. Look for monthly hiring of up to 250,000 jobs this year, says Scott Brown, chief economist at Raymond James and Associates. Economic growth was gaining speed at the end of last year and that should lead to better job growth. If a quarter-million jobs were added to the economy each month, the "jobs market would be back really in good shape," says John Challenger, CEO of Challenger, Gray and Christmas, a leading outplacement firm. Added reason for optimism was seen in the December private payrolls report from ADP, which showed employers added 238,000 jobs -- better than any other month in 2013. That means the unemployment rate should fall "gradually" to 6.5 percent or lower this year, according to Alan MacEachin, economist at Navy Federal Credit Union.
- Some of last year's headwinds are turning to tailwinds this year. Remember challenges the job market faced last year, mostly having to do with government? Those clouds have largely lifted. "Federal fiscal policy was the major headwind for the economy in 2013," Brown says. The negatives included federal budget cuts and a payroll tax increase. But Brown says state and local governments, a "major drag" in the early stages of the recovery, should add jobs this year. "We're keeping our fingers crossed once again," he says.
- Hoping for a big raise this year? You might have to continue waiting. Even for those who are currently employed, a frustration for many is the measly pace of wage growth. "For the typical worker, you really haven't much in the way of real wage gains," says Brown. There's no immediate prospect that will change soon. Brown says an exception is where "you see some wage pressures for highly skilled positions, certain technology jobs -- obviously those wages are being bid up a bit."
- With increased home-building, construction jobs are surging. Private employers added 48,000 construction jobs in December, according to ADP's report, the most since 2006. Strength should persist this year. Construction firms will need to add between 250,000 and 350,000 jobs this year, according to Ken Simonson, chief economist for the Associated General Contractors of America." This reflects higher volume and inability to keep expanding hours of current workers, says Simonson. As a result, qualified workers will be hard to find in some areas of the country to keep up the home-building pace.
- Look for improvement in the quality of jobs being added this year. One complaint about the job market has involved growth focused on the retail and leisure and hospitality fields. There's now a broadening of the outlook. Not only should manufacturing and construction employment rise, but business and professional services, too. In other words, white-collar jobs seem to be on the upswing. Challenger says the sectors with upbeat outlooks include engineering, technology and health care. Taken together, Challenger says if the improvements continue, "some would wonder if we were nearing full employment."
Are you personally optimistic about your job prospects? How do you think 2014 will shape up?
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