Summer Hiring Trends

By Jane M. Von Bergen
Inquirer Staff Writer

The U.S. economy added a lackluster 121,000 jobs in June, the Labor Department reported yesterday, falling short of economists' forecasts of around 175,000.

The count of jobs added to the economy last month did mark an improvement from the 92,000 new positions logged in May - the fewest in seven months.

"Economic growth is moderating, so nobody is on a hiring spree," said Richard Yamarone, economist at Argus Research. He and others cite the price of energy, the rise in interest rates, and the softening of the housing market.

Or maybe it's just the annual summer slowdown.

That's how it looks to Rich Milgram, chief executive officer of Beyond.com, a King of Prussia company that runs more than 11,000 online job boards.

"It's summer," he said. "People don't hire when they are on vacation. And frankly, even in the college market, the real talent in the college market were hired as soon as they graduated in May."

Hiring activity usually drops from May to June, he said, judging from the activity on Beyond.com's job boards. Given the steadiness of the unemployment rate, Milgram said the Labor Department's June number looks pretty good, simply because it is higher than May's.

Since 1996, the June number has been lower than May's six out of 10 times, with a big drop just before the recession kicked in in 2000.

For this year's April-to-June quarter, employers added an average of 108,000 jobs a month. That's down from the average of 176,000 a month for the January-to-March period, and 166,000 a month for the April-to-June quarter in 2005.

Job cuts by department stores and other retailers, home builders, telecommunications companies, and other firms tempered job growth.

Health-care firms, factories, accountants and bookkeepers, computer designers, bars and restaurants, and state and local governments were among those boosting payrolls, the Labor Department said.

Both Milgram and Timothy L. Bosse, executive vice president of Hudson North America, who is based in the company's Lansdale office, say information-technology hiring has been strong locally.

Bosse sees a disconnect between economists' analysis of the numbers and the business his company, an international recruiting firm, is winning. Hudson had more business this June than it did last year, he said.

"You see the summer slowdown and the [government] numbers," he said, "but I still see that companies are engaging us."

Even as job creation slowed, workers' average hourly earnings jumped to $16.70 in June, a sharp 0.5 percent increase from May. Economists were expecting a more modest rise of 0.3 percent. For the last 12 months, wages have gone up 3.9 percent.

Aritcle by Philadephia Inquirer