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CNN Sunday Morning
Interview With Rick Cobb
Aired October 19, 2003 - 08:13 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Money and a job. If you have them, you probably think the economy is looking pretty good. But there are other barometers that can signal the economy is rebounding. Here to talk about that is Rick Cobb of Challenger, Gray & Christmas. It's a consulting organization that studies workplace trends.
Mr. Cobb, thanks for being here. Appreciate your time this morning.
RICK COBB, CHALLENGER, GRAY & CHRISTMAS, INC.: Thanks for having me.
COLLINS: Is the economy in recovery?
COBB: We think so. We've seen a reduction in the number of announced layoffs five consecutive months of this particular statistic, which is a leading indicator. We track the number of announced layoffs by month. That's the number of companies planning to go through reduction. And that data has been trending downward now for five months. And that's about a five to eight-month leading indicator typically.
COLLINS: And so we want to point out we were talking in the break about unemployment being a leading indicator or a lagging indicator.
COBB: Right.
COLLINS: A lot of people have learned that unemployment is always the last thing that you notice improving. But that's not quite what you have studied?
COBB: Well, the unemployment data shows what's already happened because those people became unemployed. So you're looking -- actually, when you look at the unemployment number, you're looking backwards in time. If you're looking at what companies are planning to do, you're looking forward. And you can have almost an entire year difference between those two pieces of data.
COLLINS: So people really shouldn't pay too much attention then to the unemployment numbers?
COBB: Well, it's hard not to. I mea, if you're unemployed, it is 100 percent regardless what the data says.
COLLINS: Right. COBB: So it certainly sets the tone. The market and the economy is an emotional animal. It reacts to what's going on right now.
So absolutely, if you're unemployed or if the economy's down, that unemployment number's significant. But in terms of what's coming, it's less of a factor. It's more of what's already happened.
COLLINS: Got you. Now about those people that you mentioned who are without jobs, because of this latest information that's coming out, should they be looking for a job a little harder now? And when do you think they could actually find one? Obviously being different for every person. But overall, how are things looking?
COBB: There are two different things to think about. One of them is, regardless of the state of the economy, it is counterintuitive. But the best time to be in the market is fourth quarter. And there are a lot of reasons for that.
One of them is, is that many of the people that you want to have an interview with travel and are only available in the fourth quarter because they try to stay home for the holidays. Another one is that a lot of your competition, the other people who would be looking for work, those people actually have the same assumption that, gee, between Thanksgiving and New Year's, there's no reason to look. So your competition goes down.
Another thing that happens is the businesses now are making plans for next year. They're putting their fourth quarter to bed; they're starting to look at what they want to do for the beginning of the new year. So even though they may not actually be hiring at this time, this is a perfect time to be available, because they're going to start to consider candidates for the coming year.
COLLINS: And what about specific sectors? What are we talking about as far as recovery is concerned?
COBB: Well, where we tend to cut when times are tough is where we tend to add when they start to turn around. We're starting to see a resurgence in venture capital. There's been about an 11 percent increase in the amount of money that's gone into the small business start-up ventures. You see an increase in the money spent on advertising and marketing because companies are expecting that things will begin to get better.
You'll see the temporary services environment, where we're saying, gee, I'd like to be ready for a turnaround. I don't want to commit to full-time staff, but I am willing to consider bringing people on in a part-time basis or on a consulting assignment. And if it continues, to bring them on as full time. So those are the areas where you start to see growth.
COLLINS: Quickly, if you could for us, tell us with the situation with the economy. Of course, given September 11, where are we at right now? I mean, what were people expecting after such a tragedy as far as this economy and obviously the human life was concerned? COBB: Well, it's a pretty broad question. I guess the issue is, if we look at what's going on with the economy now, we've expected a turnaround coming. The companies have gotten used to operating at leaner size. That's sort of that two percent body fat.
So they're not going to add staff, they're not going to add employees as quickly as they will add assets. They'll spend money on computers; they'll spend money on infrastructure. And everyone's sort of holding their breath. The things that are out there that could destabilize or cause us to have a problem with economic recovery are more about global events.
We're a global economy now. So if you have continued expansion of unrest in the Middle East, if you have a SARS or a SARS-like breakout somewhere which freezing inventory on the docks for six months, those sorts of things could impact the economy right away. They're not unemployment numbers; they're major events that happen right now.
COLLINS: All right. Good point. Rick Cobb of Challenger, Gray & Christmas, we appreciate your insights this morning. Thanks so much.
COBB: Thanks for having me.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired October 19, 2003 - 08:13 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Money and a job. If you have them, you probably think the economy is looking pretty good. But there are other barometers that can signal the economy is rebounding. Here to talk about that is Rick Cobb of Challenger, Gray & Christmas. It's a consulting organization that studies workplace trends.
Mr. Cobb, thanks for being here. Appreciate your time this morning.
RICK COBB, CHALLENGER, GRAY & CHRISTMAS, INC.: Thanks for having me.
COLLINS: Is the economy in recovery?
COBB: We think so. We've seen a reduction in the number of announced layoffs five consecutive months of this particular statistic, which is a leading indicator. We track the number of announced layoffs by month. That's the number of companies planning to go through reduction. And that data has been trending downward now for five months. And that's about a five to eight-month leading indicator typically.
COLLINS: And so we want to point out we were talking in the break about unemployment being a leading indicator or a lagging indicator.
COBB: Right.
COLLINS: A lot of people have learned that unemployment is always the last thing that you notice improving. But that's not quite what you have studied?
COBB: Well, the unemployment data shows what's already happened because those people became unemployed. So you're looking -- actually, when you look at the unemployment number, you're looking backwards in time. If you're looking at what companies are planning to do, you're looking forward. And you can have almost an entire year difference between those two pieces of data.
COLLINS: So people really shouldn't pay too much attention then to the unemployment numbers?
COBB: Well, it's hard not to. I mea, if you're unemployed, it is 100 percent regardless what the data says.
COLLINS: Right. COBB: So it certainly sets the tone. The market and the economy is an emotional animal. It reacts to what's going on right now.
So absolutely, if you're unemployed or if the economy's down, that unemployment number's significant. But in terms of what's coming, it's less of a factor. It's more of what's already happened.
COLLINS: Got you. Now about those people that you mentioned who are without jobs, because of this latest information that's coming out, should they be looking for a job a little harder now? And when do you think they could actually find one? Obviously being different for every person. But overall, how are things looking?
COBB: There are two different things to think about. One of them is, regardless of the state of the economy, it is counterintuitive. But the best time to be in the market is fourth quarter. And there are a lot of reasons for that.
One of them is, is that many of the people that you want to have an interview with travel and are only available in the fourth quarter because they try to stay home for the holidays. Another one is that a lot of your competition, the other people who would be looking for work, those people actually have the same assumption that, gee, between Thanksgiving and New Year's, there's no reason to look. So your competition goes down.
Another thing that happens is the businesses now are making plans for next year. They're putting their fourth quarter to bed; they're starting to look at what they want to do for the beginning of the new year. So even though they may not actually be hiring at this time, this is a perfect time to be available, because they're going to start to consider candidates for the coming year.
COLLINS: And what about specific sectors? What are we talking about as far as recovery is concerned?
COBB: Well, where we tend to cut when times are tough is where we tend to add when they start to turn around. We're starting to see a resurgence in venture capital. There's been about an 11 percent increase in the amount of money that's gone into the small business start-up ventures. You see an increase in the money spent on advertising and marketing because companies are expecting that things will begin to get better.
You'll see the temporary services environment, where we're saying, gee, I'd like to be ready for a turnaround. I don't want to commit to full-time staff, but I am willing to consider bringing people on in a part-time basis or on a consulting assignment. And if it continues, to bring them on as full time. So those are the areas where you start to see growth.
COLLINS: Quickly, if you could for us, tell us with the situation with the economy. Of course, given September 11, where are we at right now? I mean, what were people expecting after such a tragedy as far as this economy and obviously the human life was concerned? COBB: Well, it's a pretty broad question. I guess the issue is, if we look at what's going on with the economy now, we've expected a turnaround coming. The companies have gotten used to operating at leaner size. That's sort of that two percent body fat.
So they're not going to add staff, they're not going to add employees as quickly as they will add assets. They'll spend money on computers; they'll spend money on infrastructure. And everyone's sort of holding their breath. The things that are out there that could destabilize or cause us to have a problem with economic recovery are more about global events.
We're a global economy now. So if you have continued expansion of unrest in the Middle East, if you have a SARS or a SARS-like breakout somewhere which freezing inventory on the docks for six months, those sorts of things could impact the economy right away. They're not unemployment numbers; they're major events that happen right now.
COLLINS: All right. Good point. Rick Cobb of Challenger, Gray & Christmas, we appreciate your insights this morning. Thanks so much.
COBB: Thanks for having me.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
