Projected employment is a forward-looking measure designed to anticipate the future staffing needs of the economy. Economists compile this view to help individuals, businesses, and policymakers anticipate where the labor market is heading. Understanding these projections is important for long-term planning. They inform decisions about education, career paths, and workforce strategy by illuminating the shifting landscape of job opportunities expected to develop.
Defining Projected Employment
Projected employment is an estimate of the number of jobs expected to be available in specific industries and occupations at a defined point in the future. These figures represent the net change in employment, accounting for both job creation and job loss across the economy. The measure includes job openings resulting from employment growth or decline, and the need to replace workers who leave the labor force. Projections typically cover a long-term horizon, often looking ahead 10 years to capture structural shifts in the labor market. Estimates are expressed as a total number of new jobs and a percentage change for each occupation, including separations like retirement, which often account for the majority of openings.
The Primary Source of Employment Projections
In the United States, the authoritative source for national long-term forecasts is the Bureau of Labor Statistics (BLS). The BLS conducts a comprehensive analysis annually to develop these national employment projections. The BLS publishes this data, along with detailed occupational profiles, in its Occupational Outlook Handbook (OOH). The OOH provides statistics on hundreds of occupations, offering an outlook on expected job growth, median wages, and typical educational requirements. While state labor departments and private firms also generate projections, the BLS serves as the national standard, providing the underlying economic framework and methodology.
Methodology for Calculating Projections
The process for creating long-term employment projections is complex, relying on a multi-step modeling process to ensure consistency across the economy. The methodology begins with forecasting the overall size and composition of the labor force, including projections for population growth and labor force participation rates. This establishes a baseline for the total number of people expected to be working.
The next step involves forecasting the aggregate economy, focusing on metrics like Gross Domestic Product (GDP) and final demand for goods and services. This macroeconomic forecast constrains the subsequent industry-level projections. An input-output model translates the final demand into the required output for hundreds of specific industries.
Industry employment projections are then derived by estimating the number of workers needed to produce the forecasted output, accounting for expected gains in labor productivity. This industry employment is translated into occupational employment by applying projected staffing patterns. This systematic approach links the health of the broader economy to the specific demand for various occupations.
Key Factors Driving Employment Changes
Employment projections are influenced by several major external forces that shape the future structure of the economy. Technological advancements are a significant driver, particularly the increasing adoption of automation, artificial intelligence, and robotics. These technologies eliminate demand for workers in routine tasks while creating new jobs requiring advanced digital and analytical skills. Demographic shifts are another powerful factor, as the aging population increases demand for healthcare and social assistance workers. Changes in birth rates and immigration patterns also affect the size and composition of the labor force, while shifts in consumer demand, such as the move toward e-commerce, reshape employment across sectors like retail and logistics. Federal investment also creates localized pockets of job growth.
Practical Applications of Projections
The data derived from employment projections has practical utility for a wide range of users, from individuals to organizations setting policy. For individuals, projections offer a way to make informed career decisions, helping students select college majors or vocational training programs that align with future job demand. People considering a career change use this information to identify fields with strong growth prospects. Policymakers and educational institutions use the forecasts to allocate resources effectively. Government agencies use the data for strategic planning, determining which sectors require workforce development funding, while educational institutions design curricula to ensure graduates possess the skills sought after by employers.
Understanding the Limitations of Forecasting
While employment projections are based on rigorous economic modeling, they are not guarantees of future outcomes. The forecasts are built upon assumptions regarding long-term trends, such as stable economic growth and the continuation of historical patterns. They cannot accurately account for unpredictable, major events that alter the economic landscape. Unexpected shocks—like a severe recession, a global pandemic, or rapid regulatory changes—can cause actual employment figures to deviate significantly; moreover, accuracy is higher for large, established industries than for small or newly emerging fields. Projections are best viewed as a structured extrapolation of current trends, offering a probable path rather than a definitive prediction.