Employers Expect To Increase Hiring In Fourth Quarter

Labor market moving towards stabilizing

U.S. employers anticipate a slight gain in employment levels for the fourth quarter of 2010, according to a new survey from Manpower.

Compared to one year ago, employers in all four U.S. geographic regions surveyed anticipate hiring increases. Employers in the Northeast and South have the most upbeat hiring intentions, with a Net Employment Outlook of +6%. Employers in the West are the most reserved, with an Outlook of +1%.

When adjusting for seasonal variations, Northeast employers anticipate the strongest shift compared to one year ago at this time, with a considerable increase in hiring confidence year-over-year. Compared to Q3 2010, employment prospects are stable in the Midwest and South, while employers in the Northeast and West expect hiring to decrease slightly in Q4 2010.

“After a period of very negative hiring sentiment in 2009, we have seen greater stability for the employed throughout 2010, although with only modest increases in hiring plans. This stability is an important platform to establish for more robust labor market growth in 2011,” said Jonas Prising, Manpower president of the Americas.

“Looking back at where we were in 2009, the employment environment is more promising now, however many employers are still unsure about how the economy will fare and how robust the recovery will be. Until we move beyond this uncertainty, we are unlikely to see employers hire in a meaningful way, and this is evident in their consistently modest hiring plans.”

Consumer Confidence Up In August

Jobs outlook weighs on consumers

The Conference Board Consumer Confidence Index which fell in July improved moderately in August.

The Index now stands at 53.5 (1985=100), up from 51.0 in July. The Present Situation Index decreased to 24.9 from 26.4. The Expectations Index increased to 72.5 from 67.5 last month.

“Consumer confidence posted a modest gain in August, the result of an improvement in consumers’ short-term outlook,” said Lynn Franco, Director of The Conference Board Consumer Research Center.

“Consumers’ assessment of current conditions, however, was less favorable as employment concerns continue to weigh heavily on consumers’ attitudes. Expectations about future business and labor market conditions have brightened somewhat, but overall, consumers remain apprehensive about the future.  All in all, consumers are about as confident today as they were a year ago (Aug. 2009, 54.5).”

Consumers’ view of current conditions continued to weaken in August. Those claiming business conditions are “good” decreased to 8.7 percent from 8.8 percent. However, those stating business conditions are “bad” declined to 41.9 percent from 43.3 percent. Those saying jobs are “hard to get” increased to 45.7 percent from 45.1 percent, while those claiming jobs are “plentiful” declined to 3.8 percent from 4.4 percent.

Consumers’ expectations improved moderately in August, but overall, they remain pessimistic. Those anticipating an improvement in business conditions over the next six months increased to 17.0 percent from 15.8 percent, while those anticipating conditions will worsen declined to 13.4 percent from 15.3 percent.

Consumers were also slightly less pessimistic about future employment prospects. Those expecting more jobs in the months ahead increased to 14.6 percent from 14.2 percent, while those anticipating fewer jobs decreased to 19.4 percent from 20.9 percent. The proportion of consumers expecting an increase in their incomes held steady at 10.6 percent.

Consumer Spending Down On Housing Market

Uneven economic growth slows spending

The Deloitte Consumer Spending Index had it s its third straight month of decline in July, due in large part to weakness in the housing market.

“Real home prices had briefly picked up due to demand fueled by tax credits for home buyers, but prices have resumed their downward trend following the expiration of those credits and the housing market is now the biggest drag on the Index,” said Carl Steidtmann, chief economist with Deloitte Research, a part of Deloitte Services LP, and author of the monthly Index.

“Looking at other components of the Index in July, we see that tax rates, which had declined sharply during the recession, have basically held steady since the start of this year.  Real earnings ticked up slightly, following five consecutive declines,” said Steidtmann.

The index, made up of four components, tax burden, initial unemployment claims, real wages and real home prices, feel to 4.45 percent, from an upwardly revised gain of 4.63 percent a month ago.

“American households continue to be cautious about spending while economic growth continues to be uneven,” said Alison Paul, vice chairman and Deloitte’s retail leader in the United States.

“At the same time, consumers economized over the past two years and likely have pent up demand for goods they have foregone.  Retailers should consider strategies to stay nimble amid shifts in consumer behavior in the months ahead.  Customer data and business analytics may be particularly valuable for retailers to hone pricing, merchandise and promotions that attract their target consumers.”

Highlights of the index include:

*Initial unemployment claims fell for the seventh consecutive month, but the year-over-year declines are lessening. Unemployment claims peaked in the spring of 2009. While claims are still high, they are down nearly a third from their peak.

*Real home prices have fallen for two consecutive months.  Home buying activity has declined in recent months due to the ending of the tax credit.  Prices are likely to remain depressed for a while longer until demand strengthens again.

*The consumer’s tax burden declined sharply through most of the recession.  In 2010, however, the rate has held steady, although it continues to be down from year-ago levels.

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.”

Use Fear To Your Advantage

There’s a lot of fear at the minute. Fear of knowing is joining fear of the unknown as a staple in our lives.

Knowing the economy sucks leading to a future unknown.

Knowing we can’t stand around but not knowing what first steps to take.

Knowing you want to try something new but so many unknown things to learn.

But you know, fear is a good thing. Fear is what spurns us to experiment. Fear is what leads us to overcoming hurdles and reaching far higher plateaus on the other side. In short, fear is our friend.

It’s right to be afraid. That’s common sense. We know that we’re not in the greatest of times – anyone who says otherwise isn’t accepting the facts.

But when we accept that truth and face the fear it brings, we can work on it.

We can use the fear.

You may have been laid off. You might be in a job where there are planned redundancies. You might run your own business where clients are shrinking. You might have more time on your hands now than you did three months ago, six months ago. Use it.

Connect that time with your fear. Make yourself a deal that you’ll become master of your own destiny. Use the time to learn new skill sets, to meet new people, to widen your community of knowledge and prospects.

Brush up on your core strengths and add to them. Use the tools around you to see what people are looking for, what businesses are looking for. We have never had so much free information at our fingertips – use it.

The best resource tool on the planet is one mouse-click away. It doesn’t matter if it’s Google, Twitter, a Facebook group, a LinkedIn forum, online community, online encyclopedia or whatever. The tool you need for the fear you have is right there in front of you. All you need to do is find it.

Fear is a stumbling block. But we only stumble if we’re in the dark.

Isn’t it time we switched the lights on?