The economic menu this week features the job market, with the Labor Department due to report on April hiring and unemployment.
If the job market were a restaurant, it would be getting about three stars out of five. That's better than the zero- or one-star status we saw during and immediately after the financial crisis. But there's a lingering hunger out there for something more satisfying.
The bill of fare
Economic indicators due this week include:
- The S&P/Case-Shiller home price index for February, Tuesday at 9 a.m. (all times Eastern).
- The Conference Board's report on April consumer confidence, Tuesday at 10 a.m.
- The Commerce Department release of first-quarter gross domestic product, Wednesday at 8:30 a.m.
- The Federal Reserve's statement on monetary policy, Wednesday at 2 p.m.
- The Labor Department report on employment for April, Friday at 8:30 a.m.
Money questions before and after college
Learn what every family should know about saving for college and what a graduate needs to land a lucrative job.
Mark Hamrick: From Bankrate.com, This is "Your Money This Week."
We connect the dots between what's happening in the world and your wallet.
I'm Mark Hamrick reporting from Washington.
With graduation season here, we're diving right in on the potentially momentous transitions in life.
To begin, we talk about the hiring outlook for college grads, with workplace expert John Challenger. He tells us that prospects appear to be improving.
For parents and grandparents looking to begin saving for college, where to begin? Tuition costs continue to rise from already high levels, putting the squeeze on students and families alike.
Adam Zoll with Morningstar has some practical advice on college savings.
Stick around for this week in business history: We go back in time to the opening of an iconic skyscraper which still adorns New York City's skyline.
All of that and more coming up on "Your Money This Week.
It's the proverbial good news, bad news situation.
Congratulations: You've completed school! Now, you need to find a job.
John Challenger is CEO of Chicago-based Challenger, Gray & Christmas, advising companies on workplace issues.
To begin, I asked John about his firm's recent survey of employers on their hiring plans.
John Challenger: We surveyed human resource professionals in early April, and we asked them about their college graduate hiring this year. Nearly two-thirds of those employers planned to hire students from this year's crop of 1.8 million graduates coming out.
Mark Hamrick: And I realize this is, as we say, the first survey of its kind that you have done, but you have been observing the workforce for a long time. Given what we have been through over these past few years, do you feel like that is pretty good?
John Challenger: It does feel like it is good. Many of these college grads -- many of the college grads in recent years have felt like they have had extra hard times coming into tough job markets, but that is beginning to turn. We have seen falling unemployment, better hiring levels, more job openings over the last several months -- last few years, really -- and that is now making its impact felt on this year's grads.
Mark Hamrick: And John, you know, I know you are aware of this, and maybe you can help to drive the point home whether someone might be listening out there who is, let's say, a high school graduate or in high school or considering whether to go to college. It is really borne out across the board that education, by and large, pays dividends in the form of greater prospects for employment, but also better financial standing on down the line.
John Challenger: Well, every study has shown that lifetime earnings for college grads more than outpace the amount of money it took to spend to get into college.
We are in a market today -- we are in a job market today where skills are at a premium, companies are looking for people who can handle the analytical data-processing kinds of needs that today's workplace requires. And so, getting that college degree is just so important.
Right now, the unemployment rate for people with a bachelor's degree or higher is at 3.4 percent. It is 9.6 percent if you do not have a high school degree. That is nearly three times higher.
Mark Hamrick: And John, I know you look at all kinds of workforce data out there, and we can talk about the broader workforce for a moment. What are the sectors where you sense that the greatest demand for workers is being felt right now -- and in some sectors we know, for example, that there is some difficulty finding workers.
John Challenger: Well, some of the strongest areas are in: professional services -- we see continued job growth there; energy, as the country becomes more energy independent; health care, although we have seen some drop off in the amount of job creation there. It has been the long time bulwark biggest job creator in the economy, so even though it has come down some, it is still a strong place to look for a job.
Mark Hamrick: John Challenger, you are as close to the ground on this kind of information as anyone out there, and we really appreciate your time. Thanks so much.
John Challenger: Thanks for having me Mark.
Mark Hamrick: John Challenger. He's CEO of Challenger, Gray & Christmas. He joined us from his office in Chicago.
And be sure to check out Bankrate.com for more information on careers, including breaking news on the job market -- what sectors are hottest for jobseekers.
We're going to back up, along the education timeline now
Next up, an update on college costs and savings.
Our guest is Adam Zoll, assistant site editor for Morningstar.com.
To begin, I asked Adam: What's the most important thing for parents to consider when pondering the sometimes daunting cost of education?
Adam Zoll: Well, I think the first thing to think about is, just as with retirement, the earlier that you start, the better off you are, because you are providing your investment a greater amount of time to grow. And just like with retirement, the further out you are from your goal, the more you are able to invest in equities, so that you do have time to ride the market's ups and downs, and you also have the potential to outperform other asset classes, such as fixed-income vehicles. So, starting early is definitely imperative.
Finding a good investment vehicle is also really important. Five-29 plans, for example -- these are the college savings plan where you invest money and it grows tax-free. And then money that you take out -- the distributions that you use to spend for college expenses, which include not only tuition, but room and board -- those distributions are also tax-free. So it is a great tax-advantaged way of saving for college.
Mark Hamrick: And Adam, whether it is an article -- I know you wrote for Morningstar back that was published in October -- we talk about it at Bankrate.com all the time, the truly daunting cost of college is not to be, I will dare say, underestimated. You wrote that, essentially, the total cost per year for, I believe, it was a state school, essentially, was nearly $18,000, and $40,000 for a private four-year school. And one thing about inflation: Even though we talk about in the broader economy inflation not being a problem, it has been a problem in education, and that indicates that these numbers are just going to continue to rise. All the more reason to save.
Adam Zoll: That is right. The $18,000 number is for in-state tuition. Out-of-state, I believe, it is closer to $30,000 for a four-year public university. But you are right the rate of tuition inflation has actually started to -- it is not increasing as fast at the rate that has in the past, and part of that is because there has been a peak in terms of enrollment, demographically. There simply are not as many people applying for college, so the law of supply and demand has acted in favor of those who are college-shopping these days. However, it is still going up, and it is going to continue to go up. There is no sign that tuition is going to go down any time soon. So I always encourage people: Do not let up on savings for college -- it is not going to get any cheaper.
Mark Hamrick: Now sometimes there is a question whether you are doing a 529 plan or something else, or maybe you buy a stock that is held in trust for a minor. There is the question: Do you put this in the student's name, or how do you structure it if you are trying to help whether you are a parent or grandparent for example?
Adam Zoll: Right. Well, part of it depends on whether you see financial aid as playing a role in your college-planning experience. And, let's face it, most people would love to make their student as eligible for financial aid as possible, and in particular eligible for scholarships or anything that is going to lower that tuition cost. So you do have to be careful in terms of how these assets are placed.
Mark Hamrick: Well, the good news is Adam, that between places like your website and Bankrate, there is a lot of great information that is available online where, back in the day, you needed to go to the bookstore or at least the library to find some of this information. And we certainly would encourage people to use online tools right?
Adam Zoll: Yeah, absolutely Mark. The whole process of applying for college, let alone learning about how to pay for it, has been revolutionized by technology. Applying for college and applying for financial aid is just a few mouse clicks away, in many cases. And I really do like the fact that, for example, we were just talking about financial aid -- you can go on various college websites, for example -- if you Google the financial aid office, you can type in your financial parameters and get some sense of what kind of financial aid award your student might receive. It is not a guarantee, it is more of a ballpark estimate, but I think it can be a useful planning tool for parents who are trying to get some handle on how much college is going to cost and if they can count on financial aid, in terms of helping out.
Mark Hamrick: So it does seem appropriate. Do your homework when working on the project of college financial aid and savings. Adam, that is terrific information. Thanks so much for your time.
Adam Zoll: No problem.
Adam Zoll, assistant site editor for Morningstar.com.
Be sure to check out Bankrate.com for tools to tune up your own savings. Look at the financial planning tab at the top of the page. From there, you can find college finance, including student budget and loan calculators and other useful information.
In order to save for anything -- college or retirement -- one needs to put some money aside. But where to find the money?
Bankrate's Sheyna Steiner says it might be time for an audit of things we might be paying for and don't even know it.
Sheyna Steiner: Are you fed up with high fees? Consumers run into them everywhere, but there are only a few ways to fight them.
Banks, cable companies and cellphone carriers are famous for fees. Many of the fees go unnoticed because consumers don't check their bills or statements regularly. You may be getting hit with fees you don't even know about. So check your bills to find out what kind of fees are eating your money every month. You may be able to fight them.
No matter what the fee is, successfully fighting fees comes down to understanding when they are justified and legal, and when they are not. When arguing against fees, keep a paper trail and document any interactions with the company. Follow up with an email or certified letter with return receipt to have proof of the complaint.
It's a lot of work for a little money, but it's your money and it's worth it.
For more on this and other personal finance issues, visit Bankrate.com I'm Sheyna Steiner.
Finally, our look at this week in business history:
May 1, 1931.
After more than a year of construction, it was 83 years ago that New York's Empire State Building officially opened.
From the ground to its peak, the iconic skyscraper rises more than 14-hundred feet.
And did you know, it was the first building to have more than 100 floors?
While other structures around the world now tower above the Empire State Building, it still holds a special place in New York City's skyline, especially with themed lighting, celebrating everything from sports championships to holidays.
And who can forget the movies where King Kong climbed atop the building swatting at airplanes?
You've been listening to "Your Money This Week."
If you enjoyed the podcast, please check us out on iTunes and rate and subscribe to our program.
For more on this and other personal finance issues, visit Bankrate.com. And you can follow us on Twitter @bankrate.
Thanks to producer Lucas Wysocki for his work in the studio and to colleague Sheyna Steiner.
I'm Mark Hamrick. From all of us here at Bankrate, here's hoping you have a great week.
Weather, inventories share blame
While severe winter weather across much of the nation has been the convenient blame target for some weak economic reports in recent months, a buildup of inventories late last year also gets a share of finger-pointing.
A spring rebound is in the cards, says Lynn Reaser, chief economist at Point Loma Nazarene University in San Diego. She says the weather finally improved, and companies spent part of the first three months of the year adjusting production to better match demand.
"Now we have those two big depressants pretty much behind us, and the result is we should see some rebound in the spring," Reaser says.
Betting on the jobs report
Even with hopes for a better economic showing ahead, we may see few signs of that in Friday's jobs report.
Most economists are looking for only a slight acceleration in hiring above the 192,000 jobs added in March. The consensus appears to be around 210,000 jobs for April. The unemployment rate is seen edging down just 0.1 point to 6.6 percent.
"We're in a pretty healthy economy right now," says Sung Won Sohn, economics professor at Cal State University Channel Islands. "The only concern is that we are not creating as many jobs as we should at this stage of an economic recovery."
Other worries, he says, include the large number of long-term unemployed and the many Americans who are not working as much or making as much money as they'd like.
Quality of jobs and wages
Another important part of Friday's employment report will look at wage growth, which has been lackluster over the past year. Average hourly earnings have risen a little over 2 percent, according to the Labor Department.
There's also a persistent problem with the quality of jobs being added. In some months, lower-paying retail, leisure and hospitality jobs have made up a large slice of new hiring.
"Job growth has been in the industries with the low average wages. That is just a reflection of the weakness of the economy over the past year," says Phillip Swagel, professor at University of Maryland's School of Public Policy and former chief economist for the U.S. Treasury Department.
Fed meeting, too
This week's Federal Reserve meeting does not include a news conference for Chair Janet Yellen. The central bank is expected to continue reducing its monthly asset purchases while keeping benchmark interest rates at record-low levels.
The Fed is still seen on track for a possible rate increase next year, but is sticking with extraordinary measures. It, too, is hungry for a better economy and job market.
This week in business history: May 1, 1931
It was 83 years ago that New York's Empire State Building officially opened. The iconic skyscraper rises more than 1,400 feet. It was the first building to have more than 100 floors.
Despite its status as an architectural octogenarian, the Empire State Building continues to turn heads, particularly with themed lighting for events such as holidays and sports championships.
Follow me on Twitter: @Hamrickisms.