THE STRONG ECONOMY IS
GOOD FOR GRADUATES
'Tis the season for both high school and college graduations, and that means a new crop of young men and women looking for employment. Well, certainly, this year prospects look to be pretty good. Labor is in short supply and businesses everywhere are looking for employees; thus it is not too hard to assume that employment will be readily available, and yes, that salaries will be somewhat higher.
Of course, salaries will be significantly higher for the college graduates, as compared to the high school graduates. We have done repeated articles on this subject, and there is a premium paid for people who go on to complete their college education.
In the meantime, whether just for a summer job or for full-time employment, the picture certainly is bright for the nation's graduates this year.
On something of a related subject; the American electronics Association and the NASDAQ stock market has come out with a new report saying that some 5 million Americans now work in the high-tech industry. The survey says jobs in the high-tech area have grown 30% over the last six years. Salaries, as you might expect, are also higher. The average salary across all sectors of the labor market now at $32,000, while salaries in the high-tech area averaged $58,000 a year last year.
The study shows that California is still the largest employer of high-tech workers, followed by Texas, New York, Illinois and Massachusetts. The report says that all fifty states, as well as the District of Columbia and Puerto Rico, added high-tech jobs over the last couple of year.
As you might expect, high-tech exports are growing strongly. The report notes that American high-tech exports totaled 181 billion dollars last year, up 85% from five years ago. The biggest exporting states are California, Texas, Massachusetts, Florida, and New York. The American Electronics Association represents about 3,000 U.S. based technology companies, including those in semiconductors, software, computers, Internet and telecommunications systems, and services.
As far as the economy is concerned, things keep rolling along, and look pretty good to almost everybody but the Federal Reserve. Inflation at the consumer price level, according to the Consumer Price Index, unchanged last month. Corporate growth and corporate profits are doing very well with first-quarter corporate earnings up more than 20% across the board. In the meantime, the Federal Reserve is still fretting about too much prosperity. It almost sounds like an oxymoron, doesn't it? Still, Alan Greenspan has been so right for so long, one hesitates to criticize. In the meantime, to this observer, corporate profits are solid, employment is high, inflation is relatively under control, and as we start to look toward the second half of the year, one would think the stock market would begin to reflect some of that, wouldn't you?
To that end, as we come to the end of June, I think the market decline is nearing its end. I also think the Federal Reserve is at or nearing an end to its interest rate increases. Maybe one more in June, but that could well be it. I also think inflation will remain relatively moderate for the remainder of the year. I see the economy already beginning to show subtle signs of slowing, and those slowing signs will be much more visible in the second half of the year.
I don't believe for a second that Alan Greenspan, generally acknowledged, at least currently, as the greatest Fed Chairman of all time, wants his final legacy to be that he was the man who killed the goose that laid the golden eggs. In fact, I wouldn't be surprised if Mr. Greenspan isn't "banking" a couple of those rate increases so that late this year or early next year he can give them back in the form of cuts once the slowing in the economy becomes more pronounced. My experience tells me that some of the some of the biggest and best rallies on Wall Street have come once the market feels that the Fed is done increasing rates, and the next move will be for cuts. I remain in that dwindling camp of market observers that think that this market is still capable of new all-time highs by yearend. We'll see.
(Tom Butenhoff is a First Vice President with J. E.
Liss & Company in Milwaukee. The views are his and not necessarily
those of Liss Financial Services or the Job Connection/Hiring
Network.)