More Businesses Hiring Workers
Recovery continues at slow pace
More businesses are hiring new employees than they are cutting jobs, according to a new survey from the National Association of Business Economics (NABE).
The percentage of firms increasing payrolls rose 31 percent in July, a significant increase compared to a year ago when only 6 percent were seeing hiring gains. The percentage of firms cutting jobs continued to move lower, from 36 percent a year ago to 14 percent this July. The share of respondents expecting their firms to add employees over the coming six months rose to 39%, the highest level of hiring intentions since January 2008.
Expectations for economic growth in 2010 remained positive, though expectations declined slightly from the previous quarter. All NABE panelists again indicated business decisions are being made based on expectations for positive economic growth in 2010 (as measured by real GDP); however, only 20% of survey respondents believe real GDP will expand by more than 3% compared with 24% of survey respondents who expected that rate of growth in April. Sixty-seven percent of respondents still believe the economy will expand by more than 2.0% in 2010.
“NABE’s July 2010 Industry Survey confirms that the U.S. recovery continued through the second quarter, although at a slower pace than earlier in the year,” said William Strauss, Federal Reserve Bank of Chicago.
“Industry demand increased for a fourth consecutive quarter, although at a slower pace. Price and cost pressures were contained, allowing profits to edge higher. The labor market continued to improve, with increases in current hiring and a rise in the percentage of firms planning to add workers over the next six months. Capital spending remained stable over the past year. Credit and debt issues in Europe will likely negatively impact just over a third of the surveyed firms over the next three months.”