April 7, 2006
Strong jobs growth through ’06: staffing execs
By Nick Zieminski
NEW YORK (Reuters) - U.S. job growth this year may outpace
the growth of the past two years, but higher wages remain
limited to high-skill jobs, employment industry executives said
after a stronger-than-expected report showed broad-based job
gains and moderate wage inflation.
"It looks like we're off to a pretty good start for 2006,"
said Roy Krause, president and chief executive of Spherion
The Labor Department on Friday reported 211,000 new jobs
outside the farm sector and said the unemployment rate slipped
to 4.7 percent, the lowest since July 2001.
The pace of hiring was stronger than the 190,000 jobs that
analysts had forecast, and average hourly earnings growth of
0.2 percent was lower than expected.
Krause said clients were finding it harder to find
qualified candidates, but said wage inflation was for now
limited to specific skills such as accounting, finance and
The need to replace retiring Baby Boomers will eventually
push up wages for younger, less experienced workers but there
is little evidence of that happening yet, said Gary Burnison,
chief financial officer of executive search firm Korn/Ferry
"It's a very, very, very strong jobs market," Burnison
said, comparing the current streak to the expansion that lasted
from 1991 to 2001. Shortages of skilled workers are extending
to areas where overall jobs are declining, such as
manufacturing, he added.
Shares of staffing companies were mixed on Friday, as
stocks generally fell on fears strong job growth would cause
interests rates to rise.
Asked why many staffing stock turned lower after an initial
rally, Bear Stearns analyst Andrew Steinerman said, "I don't
think there's anything in this report for temporary help that
you'd want to read negatively."
"We believe this tightening labor environment bodes well
for permanent placement growth and temp pricing in 2006,"
Steinerman wrote in a note to clients.
Shares of bellwether temporary staffing company Robert Half
International were up 19 cents to $38.97. Manpower Inc. was up
4 cents at $58.22 in afternoon trading.
Shares of Administaff Inc. lost $1.49, or 2.8 percent, to
$51.15, Spherion lost 4 cents to $10.47, and Korn/Ferry was
down 13 cents to $20.05, all on the New York Stock Exchange.
On the Nasdaq, Kelly Services Inc. was down 8 cents to
$27.18, and Hudson Highland Group off 30 cents, or 1.7 percent,
to $17.58. But online job search firm Monster Worldwide Inc.
was up 78 cents, or 1.5 percent, to $52.18.