Just as we saw in the previous month of July, executive turnover in North America continues to slow down from the rapid rate we experienced for most of the last year. The recent slowdown in executive turnover has not been dramatic and we anticipate turnover will begin to grow again as we move into the Fall and Winter months. Last Friday morning the U.S. Department of Labor’s Bureau of Labor Statistics released its highly anticipated August 2012 Employment Report, The Gallup Organization on September 6, released its unemployment numbers for August and earlier in the week, ADP released its Private Employment Report. All three reports showed poor progress in job growth and a small reduction in overall unemployment.
The
Labor Department’s BLS Report stated,
Total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent,…
… The unemployment rate edged down in August to 8.1 percent. Since the beginning of this year, the rate has held in a narrow range of 8.1 to 8.3 percent. The number of unemployed persons, at 12.5 million, was little changed in August.
U.S. unemployment, as measured by Gallup without seasonal adjustment, is 8.1% for the month of August, down slightly from 8.3% measured in mid-August and 8.2% for the month of July. Gallup’s seasonally adjusted unemployment rate for August is also 8.1%, a slight uptick from 8.0% at the end of July.
These results are based on Gallup Daily tracking interviews, conducted by landline and cell phone, with more than 30,000 Americans throughout the month. Gallup calculates a seasonally adjusted unemployment rate by applying the adjustment factor the government used for the same month in the previous year. The government adjusted its July numbers downward last year, but made no adjustment in August, which accounts for the increase in seasonally adjusted unemployment despite the decline in the unadjusted number.
U.S. unemployment declined significantly during the first part of the year, but August marks the third straight month with little change in the unadjusted number. Gallup’s estimate of adjusted unemployment has increased by 0.3 percentage points since June. Despite the lackluster jobs growth, August’s 2012 unadjusted and adjusted unemployment are each more than a full point lower than they were in August 2011.
Employment in the U.S. nonfarm private business sector increased by 201,000 from July to August, on a seasonally adjusted basis. The estimated gain from June to July was revised up from the initial estimate of 163,000 to 173,000.
Employment in the private, service-providing sector expanded 185,000 in August, up from 156,000 in July. Employment in the private, goods-producing sector added 16,000 jobs in August. Manufacturing employment rose 3,000, following an increase of 6,000 in July. Employment on large payrolls—those with 500 or more workers—increased 16,000 and employment on medium payrolls—those with 50 to 499 workers—rose 86,000 in August.
Employment on small payrolls—those with up to 49 workers—rose 99,000 that same period. Of the 86,000 jobs created on medium-sized payrolls, 12,000 jobs were created by the goods producing sector and 74,000 jobs were created by the service-providing sector.
Construction employment rose for the third consecutive month, adding 10,000 jobs, marking the best reading since March. The financial services sector added 8,000 jobs from July to August, marking the thirteenth consecutive monthly gain.
Here in the United States growing executive turnover remains one of the few bright spots for the United States economy. While Liberum’s assessment for the future of the U.S. economy is a minority view, we still see hope for growth in the economy and in overall jobs. For the next few months, Liberum expects to see reasonably robust turnover in the nation’s corporate executive ranks. Today’s Federal Reserve announcement is another push forward that might help with job growth going forward.
Below is a simple breakdown of the key executive category percentage increases for August 2012 compared with August a year earlier and the previous month of July 2012. The year to year changes overall were for the first time in nearly a year negative.
- For August only one of four key categories saw an increase, CEO changes showed no change from a year ago, CFO changes declined 13%, overall C-level (as defined by Liberum Research as board of directors, CEOs, CFOs down to corporate VPs) changes declined 17% while board of director changes increased 131% as compared with August 2011 totals.
- The month to month change in executive turnover showed consistent increases for all four key areas for July 2012 to August 2012, a positive sign for the future. CEO changes increased 13%, CFO changes increased 20%, overall C-level changes increased 10% and board of director changes increased 22% respectively.
Below are four graphs illustrating the August sector breakdowns and total turnover changes for CEOs, CFOs, C-level and Board of Directors.
August 2012 CEO Changes By Sector
Job growth and unemployment remain serious problems for the North American economy. Executive turnover continues to serve as one of the few positive bright spots within the United States and Canadian economies. For the last year overall executive turnover has remained high, a huge change from the declining numbers registered in the previous years during the height of the financial crisis. Unlike growing unemployment numbers, turnover at the top typically portends positive economic growth in the near future. While executive turnover numbers have moved off of trending highs, they have continued to follow a growth pattern over the last year.
