One of the overarching goals of economic forecasting is accurately predicting when a recession will occur and what can be done to fix it, though no one has yet been very successful at it. IIEP affiliate researcher Tara Sinclair thinks that private data might hold the keys to improving forecasting methods. As Chief Economist to the largest job site in the world, Tara uses Indeed.com data for a unique and unprecedented insight into the behaviors of job seekers.
With such large quantities of data to analyze and work with, Tara is excited for the future of economic forecasting. She has also learned that job seekers are “really quite savvy,” and that requirements in the job market are changing – with a major impact on millennials.
- How exactly does your position with Indeed.com aid you in uncovering labor trends?
As Indeed’s Chief Economist, I have access to data on over 140 million unique visitors to the site each month along with job postings in over 50 countries. We launched the Indeed Hiring Lab earlier this year with the goal of using the new “big data” we have to produce insights about labor market behavior and trends. From our research I have learned that job seekers are really quite savvy in the labor market – they know where the jobs are both in terms of occupations and locations.
- In what direction do you see unemployment trends heading and why?
I’m actually hoping we see a small uptick in the US unemployment rate in the near future. This might be good news for the economy if it is due to people who had stepped out of the labor force deciding to start looking for a job again. Right now our labor force participation rate is quite low, so a small unemployment rate does not mean a high employment rate. In fact, the US’s employment to population ratio over the past 4 years has been hovering at a 25 year low.
- What sectors are experiencing the most job growth in the short term, and what does that mean for the economy? What about the long term?
Healthcare has really been the key growth area in terms of employment and the BLS projects it will continue to be near the top in terms of growth out to 2022 (as far as their projections go). This in part reflects the key demographic trend our labor market is facing at the moment – the aging of our population. This has the potential to have serious impacts on our economy in all sorts of areas from the performance of the stock market to the types of jobs that our economy will create.
- Do you think job opportunities for recent graduates are as scarce as many are saying?
The labor market has improved substantially from a few years ago, so I think new and recent graduates should see more options now – and hopefully even more so in the coming months as another graduation season comes around. One piece of particularly good news: the unemployment rate for people with college degrees fell to 2.9% in December. Thus there is a substantial benefit to having a college degree in this respect since the overall unemployment rate is 5.6%.
- How do you think technology and the Internet are shaping job sectors? Are new fields emerging?
There are so many job titles involving technology that didn’t exist just a few years ago. One field I find particularly interesting is “social media,” but there are so many others. Lots of other jobs are changing because they now require more technical skills than in the past. A little bit of training in computer programming can now help someone in almost any field.
While millennials have grown to know that the most lucrative fields are in engineering and computer science technology, Tara says that this is not a complete picture. Instead, these skills can be incorporated into any number of different career paths. Sinclair said that a wide variety of fields now require training in engineering or computer science-oriented skills. Instead of being limited to a small number of career paths, STEM skills are now used in every sector. These can encompass major programming software and a variety of computer coding languages.
Aside from technical fields, Tara sees the largest growth happening in healthcare industries – although she finds it disconcerting that millennials are not headed in this direction. The baby boomer generation is aging, and education levels from associates to doctorates are needed to fill this gap in care.
College degrees are more important now than in any other time period, and unemployment rates for graduates are almost three points below national averages. Unemployment rates, however, do not represent the full spectrum of employment. More telling, instead, are employment to population ratios – which paint a picture in which college graduates are not seeking employment.
Tara explained that we can see this mystery population in every corner of life. College graduates who actively seek employment can find it, but there are large numbers of these individuals who drop off the radar. Additionally, many adults lost their jobs after the 2008 recession and never returned to the job market – or the search.
Who are they? What do they look like? Economists will be spending the coming years trying to find the answers.
Written by IIEP Staff Member, Alexa Smith-Rommel