Economic Outlook Still Murky as Job Market Remains Weak
by Terri Eyden on
By Frank Byrt
The March US Department of Labor jobs report showed fewer jobs were added than in any month in almost a year, which adds to the uncertainties facing small businesses and accountants.
Just 88,000 jobs were created last month, far below February's 268,000 gain. And while the unemployment rate dropped to a four-year low of 7.6 percent, it was only because nearly half a million people dropped out of the labor force altogether, according to The Wall Street Journal.
Cliff Parker, a CPA with a tax practice and also the owner of Parker & Associates, a recruiting firm for accounting and finance professionals, told AccountingWEB that while there were signs of recovery last year and into the first quarter, "the big question is whether it's sustainable, and I don't know."
Because of the many unresolved issues surrounding the Affordable Care Act of 2010 ("Obamacare"), Parker said many small businesses are in a hiring holding pattern. "The big companies aren't that affected by it, but for small businesses, with fifteen or so employees, there are still a lot of unknowns that are going to have to play out."
CPA and managing partner at DiCicco, Gulman & Company LLP Lenny DiCicco told AccountingWEB he typically takes jobs reports "with a grain of salt" because they're revised so often. He added that among his firm's clients, "the numbers are healthy, but I don't think anyone comes out of a slump in the economy immediately. I see a cautious optimism."
J. Thomas Hood III, CPA, CEO and executive director of the Maryland Association of CPAs (MACPA) told AccountingWEB MACPA's recent poll of approximately 400 CPAs – CFOs, controllers, and management accountants in business, industry, nonprofit organizations, and government – showed that less than half were pessimistic (about 40 percent), and 50 percent were cautiously optimistic.
Hood said, "All felt the economy continues to be fragile. A slight majority said they were moving into a focus on growth and 'market development' from the previous position of cost cutting and cost control. This would indicate possible hiring in the near future, despite the bad jobs report."
But it's a nightmare tax season for accountants. "Unfortunately, I continue to hear that this is the worst tax season ever, due to the stress on taxpayers from Congress' last tax action, the IRS' delays and subsequent short staff (allegedly due to sequester), piled high on top of the normal workload compression on CPAs in the tax business," Hood said.
According to the MACPA poll, the biggest challenges facing Maryland CFOs and controllers include:
- Keeping up with regulation and compliance.
- Dealing with health care costs under Obamacare and uncertainties in implementing the program.
- Finding time to keep up with technology and social media.
- Dealing with the uncertainty and lack of sustainability of the federal and state governments.
Parker said there's been a slow economic recovery since the 2008 slump, but 2012 was a good year in his recruitment business. "I think [the market for accountants] is pretty good; it's a pretty tight market."
In addition, he noted that some firms are beginning to have trouble keeping staff levels where they need to be, as employees with experience leave for greener pastures or greater opportunities.
Hood concurred, saying, "On the public accounting side, I continue to hear many firms finding growth and many continue to be actively [recruiting] accounting students. In fact, due to the demographics in the market, I am predicting a talent war that I am already seeing starting to break out. As Baby Boomers begin to retire, the Gen X behind them represents only half as many people. That means for every two Boomers retiring, there is one Gen X manager to take over."
- AICPA Survey: CPAs More Upbeat on Economic Outlook, but Still Cautious
- CPA Firms Need to Find New Ways to Build Revenue in Post-Recession World
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