Source | FastCompany : By J.T. O’DONNELL
The U.S. economy may have added more jobs last month than experts had predicted, but while that’s something to cheer, it isn’t cause for getting too cozy. A recent J.P. Morgan economic model, based on a broader range of indicators, puts the chances of a recession occurring within the next 12 months at roughly one in three.
Recessions, after all, are cyclical. So the question is less whether we’re in for another one than when. I’m not an economist, but my many years in the staffing industry have taught me that there are some warning signs. Here are four potential pressures to pay attention to.
A report published last month by the National Bureau of Economic Research(NBER) claims that, based on historical trends, a 10% increase in the number of Americans over 60 slows per capita GDP growth by around 5.5%. In the last 20 years, census data shows that the U.S.’s older population grew by 16.8%, putting us on track for slower growth over the next two decades. (Just last week the New York Times noted that slower economic growth seems to have become the new normal across the developed world.)
“This dramatic shift in the age structure of the U.S. population,” the NBER study’s authors write, “has the potential to negatively impact the performance of the economy as well as the sustainability of government entitlement programs, and could result in a decline in consumption for the population as a whole.”
It’s usually fluctuations in the unemployment rate that get the most press, but theunderemployment rate—which describes those working part-time but who want full-time work, plus people who’ve stopped searching but still want a job—remains at 10%, according to the Bureau of Labor Statistics (BLS). That suggests there’s a significant chunk of recent college grads and experienced professionals out there who are still finding it tough to land jobs that meet their skill levels.
Temporary staffing companies are typically the first to see growth after a recession. So when hiring rates in that market start to slow down—or, as happened this June, when hires actually decline—it can be a sign of a downshift in the economy. The decrease in the use of temporary workers is usually related to cost-cutting measures, since these are more expendable workers than full-time employees for companies that need to tighten their belts.