With only 4 months left until graduation, seniors across the nation are worried about entering the job market, and rightly so. The economic crisis of 2008 left the U.S. economy weak and shriveled, and the improving job market in early 2011 was setback by the European Debt Crisis over the summer. Half a year later, with the job market expanding and unemployment steadily decreasing, for the first time since February 2009 the unemployment rate fell below 8.3%. While the U.S. economy has yet to fully recover from the recession, the Class of 2012 has less to worry about than their predecessors.
The effects of the recession can be clearly seen in the financial industry a demonstrated by the thousands of job cuts by Wall Street giants in the upcoming year. HSBC and Bank of America are each cutting at least 30,000 jobs around the world, while Goldman Sachs, Morgan Stanley, Citigroup, UBS, Credit Suisse, JPMorgan, Deutsche Bank, Royal Bank of Scotland, Nomura and assorted regional banks are collectively cutting thousands of positions, too (FINS). Bonuses in major firms are less than previous years and some top employees will even receive pay cuts and less compensation.
While the major players in the industry are facing shrinking markets, a handful of job fields have positive outlooks. More specifically, companies are looking for recent graduates in accounting, wealth management, and emerging markets, while in Asia, banks are seeking employees to math their expanding corporate finance and fund-raising teams. Investment banks like Houlihan Lokey and insurance brokerage firms like Marsh & McLennan also plan to increase the workforce in their global operations. Moreover, the Dodd- Frank financial regulation reform bill, which was passed in July 2010, created new agencies to oversee financial institutions and will require many private-equity funds, hedge funds, and banks to hire employees.
As seen by the growing job market is all types of sectors, the U.S. job market is slowly pulling out of the recession. According to the Washington Post, “the number of jobs has been rising at a rate of 200,000 monthly” with a majority of the growth in the hospitality, business, health-care, and manufacturing industry. In January of 2012, the U.S. added 243,000 jobs over a broad range of industries with over 70,000 in professional and business services, 13,000 in accounting, and 7,000 in engineering services as shown by the U.S. Bureau of Labor Statistics. Another 44,000 jobs were added in the hospitality industry, 31,000 in health care, and 50,000 in manufacturing of metal parts, machinery, and motor vehicle. On the down side, government employment has lost 276,000 over the past 12 months with declines in local government, state government, and the U.S. Postal Service. Nevertheless, the overall results of the job market have boosted confidence and investors responded accordingly, as seen by the spike in stock prices; in January, NASDAQ achieved its highest rating in 11 years and the Dow Jones industrial average has reached its peak since the financial crisis (Washington Post).
The signs of a growing economy have not only affected the stock market, but also caused the government and rating companies to reconsider their 2012 forecasts of high unemployment rates. According to Marisa Di Natale, the firm’s director of economic research (FINS), Moody’s Analytics is reconsidering its 8.5% unemployment rate predictions. “The collective psyche seems to be turning a bit more optimistic,” said Natale. “We’re certainly going to revise our forecast.” In addition, the growth of the job market has also put an interesting twist on the upcoming Presidential elections as Obama’s approval ratings on the ABC News/ Washington Post Poll have reached an all-time high of 50% since last spring.
Whether or not the unemployment rate will continue to fall throughout the 2012 is still a mystery, but as of now, the job market is showing signs of expansion. Graduating seniors interested in business and finance will be able to find a job easier than the previous class as the industry appears to be growing and firms are looking for young graduates. Alas, amidst the hectic recruitment season of January and February, there is a glimmer of hope for the Class of 2012.
Photo Credit: Northwestern University