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I previously estimated the unemployment rate to top out in the 5 to 6% range, but based on the most recent “unexpected” unemployment numbers, I am now looking at the bottom end of that range.

Paul Sturgeon

October 24, 2022

2 Min Read
young woman looking surprised
Image courtesy of Alamy/Marina Sharova

Last Thursday, the US Department of Labor released the initial claims for state unemployment benefits. The figure of 214,000 was less than economists had forecasted, and lower than the previous two weeks. The word most used when reporting this was — “unexpected.”

In our previous Talent Talk, we pointed out that the increase in unemployment that Federal Reserve Chairman Jerome Powell really wants, is not happening, so the low unemployment claims were not unexpected to us.

Philadelphia Federal Reserve President Patrick Harker said last week, “Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year.” I have not weighed in on how high I think rates will have to go in this cycle — it’s not my area of expertise — but the 6% range seems more likely to me. The Fed has its work cut out for it.

Eventually this headwind will slow the labor markets, but while I previously estimated the unemployment rate to top out in the 5 to 6% range, I am now looking for the bottom end of that range. So, what does that mean for hiring in the plastics industry?

I haven’t had the opportunity to quote Rudyard Kipling for a while, but he famously said, “If you can keep your wits about you while all others are losing theirs…the world will be yours and everything in it.” Interest rates will rise, the economy will slow, and unemployment will increase. Do not be fooled by these short-term side effects, the underlying strength of the economy is still there and there are signs that we may be poised for some pretty crazy growth in manufacturing on the other side of this cycle.

This is your opportunity to selectively add to your organization while perhaps others are not. That is what the leading companies in plastics are doing right now. That’s what I am doing.

 

paul-sturgeon-150.jpgAbout the author

Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].

About the Author(s)

Paul Sturgeon

Paul Sturgeon is CEO of KLA Industries, a national search firm specializing in plastics, packaging, and polymer technology. If you have a topic you would like to see discussed, a company that is growing, or other ideas for this blog, e-mail Sturgeon at [email protected].

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