It’s all looking up. On August 1, the Commerce Department published data indicating a huge rise in consumer spending in June, now followed by a shift in labor demand from employers to employees. Referred to as a “virtuous cycle,” by Nariman Behravesh, chief economist for HIS Inc., job gains are leading to an increase in household expenditure, and thus encouraging employers to hire. Rather than workers seeking companies, companies are now seeking employees.
Implications of these changes to the economy include a prospective increase in interest rates, as well as an increase in wages. Hourly earnings only increase by 2% since July 2013, struggling to keep up with inflation rates. However, according to Michael Durney, CEO of Dice Holdings Inc., due to the shrinking pool of available candidates,
I think you’re going to start to see wage inflation,” said Durney, whose company provides specialized websites that match employers with potential employees in industries such as technology and financial services.
For both recent graduates looking for employment, and those effected by the 2009 18-month recession, the economic outlook is positive. The prospective increase in wages combined with high employer demands and increased retentions rates within companies encourages job seekers. For discouraged workers, those who have dropped out of the labor force due to the inability to find employment, the Labor Department urges they resume their job search as the workforce continues to grow.
Read more here- “Job Market Tilts Toward U.S. Workers in Virtuous Cycle,” (Rich Miller and Victoria Stilwell, Bloomberg)