See the complete list of trends that we analyze.

1) U.S. Job Market Overview

Job seekers in 2008 will find a mixed hiring climate. Barring any economic catastrophes due to such continuing risks as terrorism strikes, energy shortages and natural disasters such as hurricanes, there should be a reasonable variety of good employment opportunities. However, job seekers who want good positions will be forced to be better prepared and to do better research than in the boom years of the recent past.

The general outlook is that 2008’s job market will slow. In the 2007 edition of this guide, we warned of “a slowing housing market that may become very soft in 2007.” Unfortunately, we were right. Job seekers in 2008 should be prepared for the fact that nearly all industry sectors will suffer some ill effects from economic and financial market problems that originated when the housing bubble finally popped in mid-2007.

The good news is that a select set of major employers and mid-size growth companies will offer exceptional job opportunities during 2008. Meanwhile, the fact that the unemployment rate has been extremely low in recent months will be an aid to people who are seeking new jobs. (That is, the total pool of Americans seeking employment has been relatively small.)

In this period of challenges and opportunities, some companies will enjoy booming business. For example, it’s a terrific time to be in the business of oil field services. Many sectors such as solar energy, health care, e-commerce, trucking and logistics services are booming. Other employers will hire only limited numbers of employees, while some will continue to downsize due to a variety of factors. For example, manufacturing and certain types of service jobs that can be offshored will continue to move to factories in lower-cost nations like China and India. Some firms will continue to wrestle with challenges such as intense competition and high energy costs. Americans who find themselves in the market for a job will need to understand the changes surging through the economy in order to determine which companies to pursue and which to avoid.

One of the most profound impacts on the corporate world, and therefore the job market at major firms, has been the rapid growth in corporate acquisitions by private equity investors. The prime aims of private equity purchasers include reduced costs (and therefore often reduced employee counts), increased debt (and therefore increased job risk for employees) and short- to mid-term resale or public IPO of the firm under consideration. However, the tightening of the world’s corporate credit markets as of late 2007 may put a damper on the private equity business.

Job seekers in 2008 will continue to hear a lot of conflicting and sometimes confusing information about the state of the job market and the state of the economy overall. In order to create a robust job market, corporate investment, profits, productivity and revenues must align themselves correctly. Fortunately, many of these economic indicators were positive during the 2004 to mid-2007 period, and millions of new American jobs were created. As 2007 was winding down, the residential real estate crash, higher financing costs and difficult corporate credit markets were combining to restrain the economy and put a damper on the creation of new jobs.

During 2008, chief executives will continue to find themselves under intense pressure to boost sales and profits while keeping their staffs and investment needs lean. The uncertainty created by threats of terrorism and high energy costs will make corporate executives cautious.

New MBA grads may find it a bit harder to land their dream jobs in private equity or investment banking. At the same time, there will still be great opportunities for those who are diligent in seeking good employers.

The trends of outsourcing and temporary workers are still going strong. One result is that many people who would prefer to be hired as permanent employees will continue to work as temps instead. Other employees will find that their jobs have been eliminated because work has been outsourced to another firm, or workers have been hired in nations such as India at vastly lower cost. The U.S. employment market is evolving quickly, and job seekers must be both knowledgeable and nimble in order to position themselves to find promising careers.

Economic Factors Affecting the Job Market

Business Productivity: Productivity has been rising at desirable rates in recent years. That is, more business can be produced—whether it is goods or services—by utilizing fewer workers than before. This will be extremely beneficial to the U.S. economy in the long run, but it can hurt the job market over the short term. Productivity is boosted by new technologies, improved management methods and other factors. It can also receive a quick boost from restrained corporate hiring. If rising productivity occurs along with rapidly rising sales and profits, then the job market will improve. Corporate Sales: During 2004-2006, corporate revenues were robust in many sectors—a very positive sign for employment. In particular, industries that had been hit extremely hard by the tech bust in 2000-2001, such as telecom companies, found business improving. For 2008, many sectors, particularly those directly affected by housing markets, will find growth more difficult to come by. Corporate Profits: When profits increase sharply, companies are inclined to increase business investment and hiring. In most industries, corporate profitability took a considerable hit during much of 2001 and 2002. Fortunately, 2004 through 2006 saw steady growth in corporate profits as the economy rebounded. As a result, large numbers of new jobs were created during recent months and the national unemployment rate was extremely low through late 2007. Profits will likely be less robust in 2008.

The employment market during most of the 1990s was exceptionally strong. In April 2000, the unemployment rate dropped to 3.9%, a 30-year record low, and 24 million new jobs had been created in the U.S. during the then nine-year-long economic boom. (Like all boom times, the boom of the ‘90s finally came to a close; likewise the unprecedented job market and stock market wound down as well.) At the same time that the number of jobs ballooned, workplace efficiency increased at a rapid rate. U.S. business productivity climbed by an average rate of 2.9% each year from 1996 to 2000, nearly double the rate of 1.5% seen over the previous 20 years. Very strong productivity growth continued through 2004 and 2005.

By late 2001, as the tech boom tapered off, the unemployment rate shot up to 6%, representing just under 9 million people seeking jobs. The unemployment rate was very low, at about 4.5%, during most of 2007. (Unemployment has been quite low when compared to most of the past 60 years.)

Meanwhile, tens of millions of Baby Boomers are set to retire and leave the job market—this will make prospects more promising for younger workers.

In order to compete effectively in today’s job market, one of the most important things you can do is arm yourself with knowledge. It is vital for the knowledgeable job seeker to use the best reference tools possible in order to seek out employers that offer a reasonable balance of financial stability, coupled with opportunities for advancement and monetary incentives. Excellent job opportunities exist if you know where to look. Many of America’s most successful firms currently need multitudes of new employees.

For example, health care continues to create hundreds of thousands of job openings yearly. There is a critical shortage of nurses and other health care specialists. Biotechnology leaders will greatly expand their businesses. Thousands of additional companies, in technical and non-technical sectors, will need large numbers of new hires. In particular, companies that offer products or services that save time and/or money will prosper—for example, many types of discount retailers, along with companies that offer services that help businesses operate more efficiently. Meanwhile, large companies that are not increasing their overall numbers of employees will be hiring on a regular basis due to normal attrition—that is, the loss of employees due to retirement, relocation or other personal circumstances.

Only about one-third of newly-created jobs will be at major employers. Much of America’s employment growth will stem from small to mid-size firms.