Where is the U.S. Economy Heading in 2016 and is Your Job Safe?
U.S. economic prosperity in 2015 is perhaps best described as confusing given stock market volatility, the Fed’s struggle to normalize monetary policy, the lowest labor force participation rate in nearly four decades, and a national debt quickly approaching $19 trillion relative to an unusually robust domestic housing market, a greatly improved national U-3 level unemployment rate, and an encouraging and fairly stable consumer price index (CPI). So what gives? Why the contradictions in trending behavior? What can be learned from this data and, perhaps most importantly, is your job safe in 2016?
December 16th the FOMC announced its intention to raise the federal funds rate for the first time in almost a decade “¼ to ½ percent”. Essentially the Fed stated this change of attitude is defensible due to various positive data measures. Unfortunately the Federal Reserve’s monetary policy has caused many to speculate housing appreciation levels post the Great Recession are unjustified, producing a questionable foundation that could lead to the next housing bubble. Of course time will tell if these conjectures materialize into reality, but what should be of concern is if your job is substantially affected by the housing industry. According to the National Association of Realtors, “existing-home sales dropped off considerably in November to the slowest pace in 19 months” noting definitive causation, at the moment, is uncertain.
Another example worth evaluating is the sudden sharp rise in initial unemployment benefit claims ending the week of December 26th – 20,000 to be exact – as reported by Reuters. Although seasonal employment is known for its volatility, the 4-week moving average climbed “4,500 to 277,000” and recipients collecting unemployment aid after the initial week “rose 3,000 to 2.20 million” to end the week of December 19th. Furthermore the Bureau of Labor Statistics (BLR) “Employment Situation Summary” for November 2015 disclosed “1.7 million persons…wanted and were available for work, and had looked for a job sometime in the prior 12 months” and another “594,000 discouraged workers…not currently looking for work because they believe no jobs are available for them.”
Given the aforementioned, which is just a tiny piece of the tip of the ice berg when it comes to researching economic market indicators, it is reasonable to question job security in 2016. Consequently when did you last pause to reassess your chosen profession – industry in general – at the local level? For those searching for gainful employment or contemplating a career shift, have you examined the viability of finding gainful employment in the city, county, or state you call home? What are the job prospects and wages and are the opportunities sustainable relative to cost of living and economic trending patterns? For those interested in learning more about employment and wages, the BLR publishes a wealth of statistics for consumption on an ongoing basis.
The point is the U.S. economy has demonstrated an inability to fully recover from the devastating destruction caused by the 2008 Financial Crisis. Though improvements have been made, and together as a country it seems we are moving in the right direction, albeit very slowly, achieving economic strength and prosperity seems more of an elusive dream than an absolute guarantee. Accordingly if you have convinced yourself that you have achieved job security within your respective occupation maybe stepping back to re-evaluate and justify your logic is wise because realizing true U.S. economic prosperity in 2016 is arguably doubtful at the present time.