Unemployment rates and the state of the economy are traditionally topics not to be brought up at holiday gatherings or anywhere you want to keep the peace. Opinions can vary drastically with some experts basing unemployment on the U3 number while others swear by U6 as the more accurate assessment. Some even consider the fact that there could be up to 10 different types of unemployment in the United States that go beyond the three main ones of Cyclical, Structural, and Frictional.
As it relates to 2019, the present United States unemployment rates as of the end of October 2019 are calculated as 7% (U6) and 3.6% for U3 as shared in the news release from the United States Department of Labor. This marked a .1% increase from September 2019.
So, what does that mean for 2020 forecasts? Looking at the U3 model, the panelists from the FocusEconomics Consensus Forecast predict the unemployment rate to average 3.7% in 2020 and 3.9% in 2021. Economists from Goldman Sachs predict a more positive future, with their forecast of a 2020 unemployment rate landing at 3.25%, which would mark the lowest unemployment rate since the United States took part in the Korean War.
What should businesses plan for as they are projecting their hiring plans for the future? The most important things businesses can do are to stay on top of the economic forecasts and meet with economists and their financial advisors. If the economy starts shifting toward a potential decrease in growth, it is crucial that plans are appropriately put into place to help combat the financial burden by putting forth such efforts as a hiring freeze for nonessential personnel. If Wall Street is showing a healthy economic outlook, businesses can plan to stay status quo or increase their hiring as needed and supported by their bottom line. Assuming the economy is in a positive place, keeping up with industry standards and trends as it relates to pay scale is also important as it can impact the caliber of talent you are attracting when the competition is high.
As we enter 2020 if you’re looking for qualified candidates who will help your organization’s growth, contact TRC Staffing Services today.