As May comes to a close and fresh college graduates begin flooding the workforce, the U.S. economy appears to be standing on and increasingly stronger and more stable legs, according to several economic indicator reports released this week.
“The numbers that you’re seeing from the national reports and indicators have shown a positive swing, and our experience on campus corroborates that,” University Career Center Director Larry Smith said. Smith said the economy seems to be having a positive influence on the job market, but the gains were modest compared to the previous economic boom.
“It’s still not terrific, though. I’d say we’re still at 50 percent lower recruitment then we were in the heyday,” he said.
The Bureau of Economic Analysis, an agency of the U.S. Department of Commerce, released an estimate report Thursday on the Gross Domestic Product, a major economic indicator. According to the report, estimates show the real GDP grew in the first quarter of 2004, exceeding advance estimates released a month ago by 0.2 percent.
“GDP, the most comprehensive measure of U.S. economic activity, is estimated to have increased 4.4 percent,” according to the report. “The increase was a little stronger than in the fourth quarter of 2003 and above the average for the past two years.”
University economics Associate Professor Tim Duy said such results indicate strong economic growth, adding that a rise in the GDP generally translates to an increase in jobs a few months down the road.
The estimate reflects positive changes in different areas of the economy, such as spending by state and local governments, consumer spending and business investment in equipment and software.
Smith said his first observation about the most recent economic indicators was that they usually don’t present a very timely picture of the economy.
“There’s usually a delay in those reports finding trends, be it either positive or negative,” he said.
But Smith said the national reports seem to confirm what he has found locally and in his own experience. The most recent report from the National Association of Colleges and Employers, a cooperative organization of businesses and career centers in academic settings, found an 11.2 percent increase in projected hiring by employers, he said.
“Comparing this year to last year, going by the career fairs, the overall recruiting on this campus increased by 7 percent,” Smith said.
He said corporations increased recruiting by 30 percent, government agencies by 12 percent and non-profit organizations by 4 percent. On the other hand, graduate schools decreased recruiting by 23 percent.
Smith said these are good signs for students leaving school for real-world jobs.
Another report highly anticipated by analysts, the Consumer Confidence Index, was released Tuesday.
The index measures how consumers rank the current economic conditions and gauges the general perception of the average American consumer. The Conference Board, a private institution that produces the monthly study, recorded a slight increase from a score of 92.9 in April to 93.2 in May. After a large jump in consumer confidence from 88.5 in March to 92.9 in April, confidence leveled off.
Duy said this makes sense to a degree because most consumers have seen little evidence of actual economic recovery in their everyday existence.
“It’s not too surprising, really,” Duy said. “If the government’s findings were good, as they were, and other positive reports came out, then confidence rises, but when people don’t see results and they don’t see neighbors getting jobs, then people aren’t willing to be so confident. Government reports can only get you so far.”
Still, consumers’ outlook for the next six months remains positive, according to the study. The number of respondents expecting business conditions to improve in the next six months rose to 22.9 percent, from 20.8 percent. However, the number of consumers expecting conditions to worsen increased from 9.3 percent to 10.1 percent.
According to the report, consumers and investors are also worried about a potential rise in interest rates over the summer, that could dampen the economy’s slow recovery.
A Conference Board economist Ken Goldstein said the important thing for students preparing to enter the job market is not to worry about the short-term economic factors at play.
“While it is important that the economy is coming back and consumer confidence is rising, (students) shouldn’t be worrying about that,” he said.
Goldstein said students should consider that the decisions they make now can affect their future careers, and that they should not be too anxious to “get their foot in the door” of jobs that they are not excited about.