Job Outlook for 2014

Slow job growth in recent times has not supported America’s image as the bustling land of opportunity. The recent 16-day government shutdown and political struggles over the debt limit will likely damage the 2014 economic forecast. Business and consumer confidence took a hit that could negatively influence job growth. Federal agencies are limited or frozen in their recruiting and hiring due to budget constraints stemming from recent furloughs.

The last five years of high unemployment and few jobs squeezed life from the economy. The unemployment rate shot up to 10% in 2009, and it dropped to about 7.5% only recently. However, the alleged 7.5% unemployment rate is misleading. Many unemployed job seekers are giving up on their search for work since grim job prospects are discouraging. This takes people out of the labor force equation and skews the unemployment numbers to look slightly better than they are.

Many economists predict that job growth will remain subpar over the next few months, but it could increase moderately as 2014 moves forward. Progress in stimulating labor markets is slow. There are about two million less jobs now than when the economic downtown hit in 2007, and there is no huge hiring surge predicted for the near term.

There were only 148,000 net new jobs created in the month of September 2013, another indicator of a still lethargic economy. The lackluster job growth indicates that the start of 2014 is shaping up to disappoint some job hunters. Wages will likely remain flat-lined in the immediate future, and consumers will continue to watch their spending. Employers will keep payrolls in check until the economy enjoys a more robust rebound.

Older workers that have been out of work for awhile are feeling the impacts of the current job market. Young workers with little to no experience have also found successfully job hunting difficult and frustrating. However, according to economists, the 2014 job market should not be quite as challenging for young people. Most expect that more college graduates will land a job in 2014.

The lack of consistent government policy has eroded the confidence of many business leaders. The Affordable Care Act, otherwise known as ObamaCare, is a significant source of uncertainty and doubt. Some businesses have cut employees’ hours to reduce them to part-time. In doing so, businesses eliminate their need to pay for and provide the expensive health care required under ObamaCare. Many employees that are lucky enough to have a job will face a big deduction in their paychecks because of the new health care provisions of the Affordable Care Act.

The news for 2014 is not all doom and gloom. The optimistic forecast is for low to moderate growth, and job generation could start to perk up towards the middle of next year. Most jobs created have been in service industries such as health care, retail and restaurants. Undergraduate degrees with the best job prospects are in finance, computer science, accounting, business administration and engineering. Job opportunities in these fields are steady. People with cutting-edge skills and higher education will be more easily employable.

As uncertainty lessens, the economy will recover at a slow but stable rate. The effects of the Affordable Care Act may diminish over time. Businesses should remain flexible and willing to increase or decrease their work force as driven by the economy. Companies have augmented their workforce by hiring temporary workers, and this has generated much of the positive job growth in the last year. As the housing market continues to limp toward recovery in 2014, there will be more construction jobs available. State and local governments will hire again after many years of cost cutting measures, due to the falling tax revenues connected to tumbling property values.

In 2014, expect the U.S. labor force to be about 162 million, about 15 million more employees than in 2004. This denotes an annual growth rate of about 1.0% which is less than the 1.2% growth rate of the previous decade. Many of the baby boomers, those born from 1946 and 1964, will continue to retire. College graduates to middle age workers will increase in the workforce. Generation Z, those born in 2000 and later years, will not enter the workforce until they graduate. Most young people realize that continuing their education is critical to landing a job.

Overall, businesses are still investing in infrastructure and equipment. Technology continues to stimulate production, which may result in more capacity than demand, but usually supply creates demand. Interest rates remain low, and corporations, entrepreneurs and small businesses are earning profits. Ultimately, businesses cannot grow without hiring more workers. The goal in 2014 is to push job gains to an average of 400,000 per month. This amount will support solid growth and position the economy for a more robust and sound renewal.