by Jeff Thredgold, CSP

The U.S. Economy

What we now call the Great Recession officially began in December 2007 and ended in June 2009.  It was the longest, the deepest, and the most painful recession since the Great Depression.

By my count, that suggests that the current U.S. economic expansion is now reaching the two-and-a-half year mark.  The current expansion has been less than satisfying both statistically and emotionally, with major headwinds still in play involving weak residential and commercial real estate markets, uncomfortably high unemployment, major European financial risk, and elevated levels of anxiety about the direction of the federal government.

The current U.S. economic expansion has been especially lackluster when considering the massive and unprecedented levels of both fiscal and monetary stimulus.  While modest economic growth has returned, a “recession of confidence” remains center stage.

Economic growth in the new year about to unfold is likely to remain substandard, with most forecasts congregating around a 1.5%-2.5% real (inflation adjusted) rate of growth.  More bearish forecasters see particularly anemic growth in 2012’s first half.

The size and scope of a possible European financial implosion could lead the U.S. and much of the world back into recession, although that is not the consensus view.  Nevertheless, investors around the globe have taken a “shoot first, ask questions later” approach to European sovereign (national) debt markets and the contagion that has now spread to more and more members of the euro community.

Government

Political theater of the absurd has been commonplace in the nation’s capital, with extreme partisan politics today’s reality.  The government’s ability to live within its means remains highly elusive, even as European developments should be sending strong signals to Washington DC about damaging annual budget deficits and a more than $15,000,000,000,000 gross national debt.

Various economic studies have suggested that any nation’s ability to prosper and grow at a satisfactory pace is endangered when its gross national debt reaches 90% of that nation’s annual economic output.  We are now at 100%…and rising quickly.

Trillion dollar plus budget deficits of the past three fiscal years will continue for as far as the eye can see.  The biggest threat to this nation is the financial cancer of irresponsible government deficits.  As noted frequently, the need to slow the future growth pace of entitlement programs is mandatory.

2012 Elections

Already tired of the political battles underway?  Just think…only 342 days until Election Day!  The failure of the “super committee” was the latest in government missteps.  An emotional national debate about 1) the size and growth pace of the federal government, and 2) who pays for it will be one key element of political discussion during most of 2012.

U.S. Employment

Wary business leaders and worried consumers have contributed to the weak level of American job creation during the current economic recovery.  The nation has regained only one-fourth of the eight million jobs lost during the crisis of 2008 and 2009.  Unless and until confidence levels improve, weak additions to employment will continue.

The nation’s unemployment rate has averaged 9.0% for the past three years. Most forecasters see an unemployment rate of not less than 8.5% by the end of 2012.

To be heard frequently during the Presidential campaign now well underway…no sitting President in the past 75 years has been rewarded with a second term when the unemployment rate was above 7.2%.  Whether the President can shift the blame for high unemployment to intransigent Republicans in the Congress will have a telling impact on election results.

U.S. Inflation

Consumer prices are expected to rise roughly 3.5% during 2011, with a slightly lesser rise the consensus view for 2012.  Weak global economic growth could lead oil prices lower, a key element in that forecast.  Over a longer time horizon, the debate continues between those expecting higher U.S. inflation and those seeing a Japan-style deflation in theU.S.

The Federal Reserve

The Fed’s most critical interest rate—the federal funds rate—has been at an all-time low target level of 0.00%-0.25% since December 2008.  Moreover, the Fed’s Open Market Committee has stated they expect this rate to remain unchanged until at least mid-2013.

In addition, the Fed has tripled the size of its balance sheet by buying massive amounts of U.S. Treasury securities and mortgage-backed securities.  The intent?  To drive long-term interest rates lower.  While such actions have been largely successful, weak home prices across the nation, high unemployment, and a more paper-intensive lending industry…negatively impacted by the Dodd-Frank financial legislation…has not led to a strong surge in mortgage refinance activity.

Housing and Mortgage Rates

Most forecasting economists see national home prices stabilizing by mid-year 2012, with very modest price appreciation to follow.  At the same time, conventional 30-year fixed-rate mortgages have been at a 60-year low near 4.0% in recent weeks.

One could make a case to delay a home purchase for 6-12 months, but mortgage rates could rise enough to offset any slightly lower home price.  Now may be an outstanding time to purchase a new or foreclosed property and to refinance a mortgage.

Global Keys

Chinese and Indian economic growth are likely to slow somewhat, while Japan struggles with very substandard performance.  High oil prices have boosted oil producing nations at the expense of user nations.  The Canadian economy has slowed, whileMexicoandBrazilare doing well.

However, these days it’s all about a fragile European economy. Greece, Ireland, and Portugal have already been bailed out, while major anxiety about Spain and Italy exists.  Even the French have seen borrowing costs rise as questions about that economy have surfaced.  A possible French downgrade from their current “triple A” status could send additional shock waves across Europe.

The Germans and the International Monetary Fund will face rising pressure to stem European debt contagion, even as impacted nations face the real need to get spending and debt issuance under control.  No other issue is more critical to global economic performance in 2012 than a solid resolution of the European debt crisis.

Jeff Thredgold, MS, is the only economist in the world to have earned the CSP designation, awarded by the International Federation for Professional Speakers and the National Speakers Association. He has spoken more than 1,000 times during the past 20 years, traveling more than 1 million miles in the process.

Inquire about Jeff Thredgold

by Zoe Training staff

Starting with a strong foundation in accounting, Dan Chenoweth has a broad background in American and international business. His focus on general management issues inherent in today’s changing business environment involves organization leadership; business process analysis and improvement; project management; strategic supplier relationships; team development; and change management. In every situation, Dan helps clients take their strategy to the bottom line.

What’s your favorite topic(s) to present on? Why?

Business ethics.  It is a multi-faceted, complex topic and there is no lack of “fresh/new” material!  Ethics do count!  They are relevant and we need to have more discussion about them in these tumultuous times.

Three words that describe your presentation style:

Relevant, interactive, different.

Why did you become a speaker/trainer?

I always wanted to be an educator. I got a BS in accounting and immediately went for an MBA specializing in accounting thinking I would be a college professor.  Then realized I needed a PhD to teach at the college level.  I then decided to go into public accounting instead but always regretted not doing more in education.  Years later, after my corporate career, I was fortunate to get back into training and education.  I now provide seminars for CPAs throughout the country.  I love working with mature audiences who push back on points and add their own insights from their own experience.

Tell us about a presentation experience that went wrong:

I had done an ethics session for a farm co-op group in Denver and it went quite well.  I was then asked to do a similar presentation in Springfield, IL for a large farm co-op conference.  My session was a “pre-conference” session.  Therefore, it was not very well attended (about 50 people) but the room was set up for 500 people for the next day’s events!  It is excruciating to try and have a dialogue with participants in a cavernous facility like that where the 50 folks were scattered throughout the room.  I felt like a rock in a tin can!  I was not able to make a connection and it didn’t go well.

What are you most grateful for in life?

I have a loving wife and family.  While there have certainly been ups and downs with all three of my children, I wouldn’t trade them for anything.  I am now blessed with three grand children and one great grand child.

Do you have a favorite quote?

“The pessimist complains about the wind.  The optimist expects it to change. The realist adjusts the sails!”

Inquire about Dan Chenoweth

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by Jeff Thredgold, CSP

It’s no secret that many economic and financial areas were severely impacted by what we now call the Great Recession, the worst since the Great Depression.  The changing nature of retirement would easily find a place on the list.

Millions of people who judiciously saved during their working years had visions of early retirement, with a view that diligent efforts to save money would help them meet income needs in their Golden Years.  Many people have been able to live their dream.

Unfortunately, millions of others saw their dreams either tarnished or shattered, with loss of employment, sharp declines in the value of retirement funds, and unexpected declines in home values.  Every age group, every generation, every part of the country was hurt by economic and financial developments of the past few years.

Yes…But

The nation’s official unemployment rate declined from 9.8% last November to 8.8% in March…the fastest four-month decline in 27 years…and clearly good news.  There is more to the story, however.

One reason the unemployment rate is lower is the fact that a smaller share of Americans are at work or counted as part of the labor force than at any time since 1983.  Just 45.4% of Americans (of all ages) were employed during 2010, down from a peak of 49.3% in 2000 (USA TODAY).

In terms of working age adults, the civilian labor force participation rate held at 64.2% in March, while the employment to population ratio was 58.5%, both down in recent years (Bureau of Labor Statistics, or BLS).  Only 66.8% of men held jobs last year—the lowest level on record—versus more than 80% of men who held jobs during the 1960s.  National unemployment rates would now be regularly quoted in the 10% to 12% range if the share of people counted as part of the labor force today matched that of just a few years ago.

Long-Term Trends

It’s no secret that working age men had been leaving the workforce for decades.  Others took an early retirement incentive from an employer, hoping to then find other gainful employment.

Still others with a specific skill set lost jobs and were unable to obtain similar employment, leading to an earlier retirement than previously planned.  The loss of millions of jobs in construction and manufacturing in recent years simply added to the exodus.

The rise of women holding jobs largely offset the loss of working men in recent decades.  The share of women holding jobs rose from 36% in 1960 to 57% in 1995, with the total soon leveling off.  The share of women employed was 56% in 2010 (USA TODAY).

Now Working Longer

Shattered dreams of early retirement, or less belief of just a routine retirement at 65, have led a greater share of older men to stay in, or return to, the labor force in recent years.  During the prior economic upswing lasting six years between November 2001 and November 2007, a net 10.4 million jobs were created.  Almost one in seven jobs was filled by workers age 55 or older (The Wall Street Journal).

Since the Great Recession began in late 2007, 7.4 million jobs have disappeared.  For over-55s however, a net 1.8 million jobs have been added.  This reflects more people putting off retirement for various reasons, as well as companies taking advantage of those workers with proven skills.

The labor force participation rate among those over age 55 bottomed out in the mid-1990s at 29%.  It has since risen by 11% to 40%.  For those over 65, the rate has gone from around 12% to 17% during the same time (The Wall Street Journal).

A higher labor force participation rate of older workers, in addition to the economic and financial factors noted above, also reflects the fact that people are living longer and are more interested in staying active with employment.  Too many of us have seen people retire early or at 65 with visions of travel and lots of golf, only to be bored to tears after the first year.

At age 65, most people can expect to live another 20 years or so.  Having a regular source of income besides Social Security and possibly a pension provides older workers with a greater sense of security, helping to boost overall consumer spending.

Suffer the Young

Greater numbers of older people staying in the labor force, combined with the loss of millions of jobs in recent years, has had a serious impact on youth employment.  The BLS notes that less than half of all 16-to-24 year olds had a job last summer, the worst on record.  Of those 16-19 years of age who are actively seeking employment, 24.5% were unemployed in March.

Savings

Too few people save adequately for retirement, with many starting a savings program too late in life to meet their retirement needs.  Too few couples have discussions about what their retirement dreams are and how they must prepare for them.

Too few workers of all ages take full advantage of 401(k) savings programs offered by employers, simply feeling they can’t afford the reduction to their cash flow.  Simply stated…there is no more powerful way to save than having an employer give you a 25% or 50% or 100% match of the funds you save in a 401(k).  The current tax deferment makes it even more valuable.

Many older people simply state that they will never retire.  I find myself saying this.  They will work well into their 60s, 70s, or even 80s, not recognizing that the body can break down.  Energy levels can diminish, while undreamed of physical and mental limitations emerge.

At the same time, however, the ongoing shift in the economy from goods producing to service providing jobs (typically less physically demanding) will help those wishing, or required, to work longer.

Jeff Thredgold, MS, is the only economist in the world to have earned the CSP designation, awarded by the International Federation for Professional Speakers and the National Speakers Association. He has spoken more than 1,000 times during the past 20 years, traveling more than 1 million miles in the process.

by Ashley Andrus

- Is the economy finally back on track?

- Are we headed for a double-dip recession?

- Will hiring pick up again anytime soon?

These are important questions that will impact the future of your organization—however, the more immediate question is: How are the ripple effects from the ongoing tight economic conditions directly impacting your employees TODAY?

Just as an individual business functions within the tides of the economy, individual employees and team members are buffeted by the turbulence associated with the ongoing economic downturn. The “new normal” translates into longer working hours, shorter deadlines, expanded job duties and responsibilities, and increased stress levels throughout the organization—all of which directly impact morale, working conditions, and your bottom line.

What can you do from a training and development standpoint to ensure your employees have the tools they need to ride out the ripples?

• Directly address increased stress levels with a variety of approaches. Organizations can offer stress management workshops and implement health and wellness campaigns to help address the stressors facing employees.  You might want to bring in a motivational speaker or humorist for certain types of events, and implement both formal and informal recognition programs, which can be effective without a high cost.  If you aren’t already doing so, consider surveying your employees for their input as to the highest-value stress relief options they’d like to see.

• Seek opportunities for increased efficiency and improved productivity. Many organizations have turned to an internal project management approach to identify process flow improvements and streamline operations—training your managers and supervisors in the Essentials of Project Management can help them hit the ground running. Beyond project management, you can provide tools to help all employees improve their time efficiency and gain a handle on the daily deluge of information they are expected to handle.

• Ensure your employees have the tools and skills they need for effective teamwork and communication. When working with fewer team members to share an unchanged or increased workload, it’s important that teams understand how to work AND play together for solid long-term results.  For some teams, communication and interpersonal skills could stand some improvement, while for others conflict resolution skills are called for.  You may want to consider implementing a psychometric tools approach and utilize the DiSC, Myers-Briggs, or other instrument to provide some common ground and language around team behaviors and expectations.

• Be alert for potential incidents of harassment, disrespectful behavior, and other compliance violations. In times of increased stress, it is not uncommon to see an increase in negative employee behavior; this may result in potential harassment complaints, hostile work environment claims, or reported ethics violations.  As an employer you must be on the lookout to quickly respond appropriately to such incidents and should also consider proactively offering harassment prevention & awareness workshops or respectful work environment programming to provide employees with the tools they need to be clear about their responsibilities and your organization’s policies and procedures.

The economy will improve at some point…however, these “new normal” working conditions are likely here to stay. Smart organizations are those taking steps to adapt now to the new normal so that they retain employees when conditions do improve and they are prepared to grow and thrive in both the rapids and the calm downstream.

Ashley Andrus is President of Zoe Training & Consulting. Her passion is making HR folks and meeting planners look like *rock stars* by providing one-stop access to 90+ speakers, trainers, facilitators, coaches, and consultants.

by Ashley Andrus, President of Zoe Training & Consulting

Even when times are good and budgets are flush, it can be easy for managers to view training and development as a cost rather than an investment towards bottom-line returns. When the economy is tight, and your boss has ordered you to cut your 2009 budget by 15 percent, and across-the-board spending freezes are the order of the day, justifying programs can feel like an uphill battle.

When done right, people development pays long-term dividends for your organization: morale is better, turnover drops, your ability to recruit qualified employees improves—and that’s all above and beyond the resulting skills enhancement and performance efficiency improvements (that result). Even in lean times, workforce development remains a “must-do” for forward-thinking organizations.

The question then becomes prioritizing possible initiatives and stretching the most that you can out of your training and development budget. Some practical suggestions for maximizing your resources include:

Identify high-reward programs that result in near-term bottom line impacts: Project Management, Six Sigma/LEAN, Sales and Negotiations, Finance for Non-Financial Managers, Time Management—each of these topics has a direct, immediate, tangible effect on employee skills impacting your organization’s bottom line.

Put your internal subject matter experts to work: Many topics (especially those related to your internal systems and processes) can be well-suited for training by existing employees. Identify subject matter experts and put them to work! Although topic expertise does not necessarily translate into training experience, you can utilize peer mentoring, coaching, and brown-bag sessions to make the most of internal resources.

Utilize technology in a variety of creative ways: E-learning courses and webinars remain popular and low-cost means of sharing knowledge, but today’s technology allows for many additional uses as well. Training can be conducted in Second Life™ or other virtual environment. Your intranet can function as a medium for asking questions and connecting employees with critical information. Social networking sites can be put to work for research and learning purposes. Opportunities abound for innovative and cost-effective knowledge transfer.

With some determination, creativity, and a willingness to explore new avenues of people development, you’ll make it through the budget crunch without giving up your training initiatives.

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by Jeff Thredgold, CSP

The “dismal science” of economics typically focuses on “bad” news. We clearly face significant challenges…no argument here. However, there are also many favorable developments taking place within the U.S. economy. This article focuses ONLY on the “good” news…

• The middle and lower-middle class had stronger income gains in 2007 than did the top one-fifth of households.
• For every dollar of U.S. economic output generated today, we burn less than half as much oil as 30 years ago.
• The number of illegal immigrants in the U.S. declined by an estimated 1.3 million (to 11.2 million) between August 2007 and May 2008. Stronger enforcement and fewer job opportunities contributed to the decline.
• Keep this in mind during the election campaign…the Bush tax cuts led to an enormous surge in overall tax revenues in recent years. In addition, the top 1% of income earners paid 40% of all income taxes in 2006, the highest share in at least 40 years.
• Overall, violent crime declined 1.4% in 2007 versus the prior year.
• Donations to charity set an all-time high in 2007, with more than $300 billion donated by individuals, foundations, and corporations. As a percentage of GDP, Americans gave twice as much as the next most charitable nation…England.
• Productivity of the average U.S. worker rose an average of 2.6% annually during the past 10 years, the largest gains in 40 years. Rising productivity is a long-term key to higher standards of living.
• American household net worth at year-end 2007 was $57.7 trillion, near the highest ever, and three times the total of 18 years ago. Net worth—the difference between assets and liabilities—had risen for 19 consecutive quarters before declining during 2007’s fourth quarter.
• The number of people who have quit smoking (46 million) now exceeds the number who still smoke (45 million). Roughly 21% of adults smoke today, versus nearly half in the early 1950s.
• Men’s contribution to housework has doubled over the past 40 years, while their time spent on child care has tripled.
• Seat belt usage by Americans was at 82% in 2007, versus 49% in 1990 and 14% in 1983.
• Average U.S. life expectancy has reached 78 years (men 75, women 80), the highest ever. This compares to 76 years in 1995, 68 years in 1950, and 47 years in 1900.
• U.S. exports to China have risen roughly 24% per year since 2001, making China the fastest growing market for U.S. goods.
• Air pollution declined 25% over the past 30 years even as the population and the economy grew. Water quality also continues to improve. More progress will occur in coming years as companies see rising value in “going green.”
• Children’s deaths from unintentional injury have dropped by almost 40% since 1987. Bicycle deaths fell 60%, while firearms-related deaths fell 72%.
• Toyota has developed a new fuel cell hybrid car that can travel more than twice the distance of its predecessor model.
• For the second time in two decades, the U.S. airline industry did not have a passenger fatality or major accident last year.
• U.S. exports of goods and services to the world are at record levels.
• Police officer deaths during 2008’s first six months were the lowest in 43 years.
• A year-end 2007 Gallup Poll noted that “more than 8 in 10 Americans say they are satisfied with their personal lives at this time, including a solid majority who say they are ‘very satisfied.’”
• Alcohol-related traffic fatalities in the most recently reported year dropped by more than half versus 20 years ago.
• The number of homeless people declined by an estimated 12% between 2005 and 2007, with an even larger decline in those who are chronically homeless.
• During the early 1960s, the five-year survival rate from cancer for Americans was one in three. Today it is two in three…continuing to climb…and the highest in the world.
• Traffic deaths per 100 million miles traveled last year were the lowest on record.
• The number of people without health insurance declined by 1.3 million to 45.7 million in 2007 versus the prior year.
• Childhood obesity, which rose sharply over the past two decades, appears to have stabilized.
• The American economy added eight million net additional jobs between 2004 and 2007. Job losses averaging 66,000 monthly in 2008, while painful, are 64% fewer than average monthly losses during the 2001 recession.
• Substantiated cases of childhood sexual abuse have fallen 49% since 1990. Physical abuse of children is down by 43%.
• More than three million girls participated in high school sports last year, part of a record 7.3 million total participants.
• The Federal Reserve aggressively reduced its key short-term interest rate seven times during the past year. One result? Interest costs for millions of Americans have declined.
• Some 68.6% of the 2.7 million “Class of ’05″ high school graduates enrolled in colleges and universities, the highest ever.
• The number of abortions performed in this country has declined by one-third since 1990 and is now at a record low.
• The U.S. rate of home ownership reached 69.2% of households in recent quarters, the highest ever, before declining slightly.
• The upward “mobility” of the typical American remains the greatest in the world. Why? The U.S. economy “rewards” the combination of hard work and educational achievement more than ever before…and more than any other country in the world.
• Women earned nearly 60% of all bachelor’s degrees awarded in recent years, versus 43% in 1970 and 24% in 1950. Women earned a similar share of master’s degrees.
• Median (half more, half less) household income rose 1.3% after inflation to $50,233 in 2007 versus the prior year.
• Illicit drug use among U.S. teenagers hit a five-year low of 9.8% in 2006, down 16% since 2002.
• The U.S. still accounts for roughly 40% of global research and development (R&D) spending.
• A record 29% of men have earned a bachelor’s degree or higher, versus 26% of women, also a record. This compares to a combined 7.7% in 1960. A record 84.6% of adults over age 25 now have at least a high school diploma, versus 24.5% in 1940.
• U.S. teen pregnancy and birth rates plummeted to all-time lows in recent years, before a slight rise in 2006. The reasons? More widespread use of birth control, more work opportunities, and more girls who “just say no.”
• Flexible work schedules are now the norm for 43% of workers, up from 29% in 1992 and 13% in 1985. This allows greater flexibility for more people, especially those with children.
• Roughly 30% of trash was recycled or composted in the latest year, versus 16% in 1990.
• In 1967, only one family in 25 earned $100,000 or more (inflation adjusted to 2005). Today, one in six families does. The share of families earning more than $75,000 annually in real dollars has tripled from 9% to 27%, while the share of families earning between $5,000 and $50,000 in real dollars has fallen by 19% since 1967.
• Violent crime overall is down 55% since 1993, with violence by teens down 71%. School violence has declined by half from a decade ago.
• The U.S. role of dominance in the global economy in recent years has been as clear-cut as at any time since the 1950s.

Jeff Thredgold, MS, is the only economist in the world to have earned the CSP designation, awarded by the International Federation for Professional Speakers and the National Speakers Association. He has spoken more than 1,000 times during the past 20 years, traveling more than 1 million miles in the process.