The U.S. Bureau of Labor Statistics reported Friday that employment increased by 304,000 jobs in January, although the unemployment rate edged up to 4.0 percent.
Employment in the accounting and bookkeeping sector increased 1,029,700 to 1,087,500. Job gains also occurred in several other industries, particularly leisure and hospitality, construction, health care, transportation and warehousing. The job gains exceeded forecasts that had predicted job gains of 170,000.
The partial federal government shutdown played a contributing role in the uptick in the unemployment rate. Among the unemployed, the number of people who reported being on temporary layoff increased by 175,000. That figure includes furloughed federal employees who were classified as unemployed on temporary layoff.
Nevertheless, the jobs report was mostly positive news and shows the larger economy managed to weather the impact of the shutdown.
“There’s no question that the jobs report that came out this morning was robust, given it was over 300,000 jobs in terms of growth during the January period,” said Jeramy Kaiman, vice president at the staffing firm Accounting Principals. “As far as what we see in accounting and finance, the overall unemployment rate picked up in January to 4 percent. Some of that’s due to the partial government shutdown. My guess is that unemployment rate is going to get revised down fairly soon. The unemployment rate in the accounting and finance sector has hovered around 2 percent, so it’s very low. By everyone’s account, that’s either at or below full employment, which means that the market has remained very tight. It’s been this way for the better part of a year in the accounting and finance sector. From our perspective, that’s not just in degreed accounting and finance jobs. It’s even in the paraprofessional sector of accounting, including operational accounting, the unemployment rate is very low.”
He didn’t see much impact on most accountants during the shutdown, although many tax professionals reported they had trouble reaching the IRS.
“From the data we have internally, we didn’t see that,” said Kaiman. “I would say in our business finding talent has been as difficult or more difficult over the past 30 days as it had been in prior quarters because we continue to see this downward trend in unemployment rates in accounting and finance, so it did not affect that at all. The market is very tight.”
He isn’t sure if more accounting personnel will decide to move from working for the federal government to working in the private sector after the shutdown, compounded by the possibility of another shutdown later this month.
“I think there’s no question that from most of the data we see and the candidates that we talk to in the federal government sector, there are a segment of candidates that have grown disillusioned being in the government sector due to the prior government shutdown and the threat of another one,” said Kaiman. “There’s no question about that, and there’s people that are maybe less loyal to working in the government sector than they were before. We do expect that there will be some percentage of government employees who shift to the private sector, which might help private sector employers in the short term, but it’s not going to be a long-term impact to the private sector.”
Employers will have to do more to retain their accounting and finance staff in the year ahead as the jobs market continues to tighten. “We’re really encouraging the clients and corporations that we work with to really focus right now on development and retention of their current staff in the accounting and finance segment,” said Kaiman. “With the unemployment rate as low as it is right now, we are starting to see wages increase. As salaries and bonuses and other forms of wages start to increase at a more rapid rate than they did last year, we do expect that will create more turnover, and we are encouraging our clients to hedge against that by giving their employees developmental opportunities, appropriate market increases, or other forms of compensation to address what we believe will be coming this year in the market.”
