NEW YORK and WEST CHESTER, Pa. (2/11/14)--The results from a pair of surveys published Monday indicate that businesses still plan on hiring, despite two months of U.S. Labor Department reports hinting at the increased possibility of a job market slowdown.
The latest statistics calculated through Moody's worldwide business confidence poll and the Conference Board Employment Trend Index showed that firms are, on the whole, preparing to take on new workers (Economy.com Feb. 10).
The Moody's study showed that almost half of respondents currently are hiring, while "a very small percentage" is shedding workers. The firm said that its measure shows hiring at its strongest level since 2003, when the survey began. The survey also revealed the real estate sector feeling most generally upbeat, while manufacturers and retailers are, relatively speaking, most glum.
The Conference Board Employment Trends Index was up in January to 116.61 from a downwardly revised 115.62 in December. The monthly gain put the January year-over-year increase up to 6%.
Driving the ETI boost were the fact that six out of its eight components all revealed improved labor market conditions.
"Despite weak job reports in December and January, the Employment Trends Index is not signaling a slowdown in employment growth," Conference Board Director of Macroeconomic Research Gad Levanon said. "We expect solid job growth and rapid declines in the unemployment rate to continue in the coming months."
Contrasting with the Monday studies is Friday's Labor Department report, which showed payrolls only increased by 113,000 in January and a slightly upwardly revised 7,500 in December, after expanding by 274,000 in November (News Now Feb. 10).
Moody's analysts said that changing political conditions have improved business' outlook, with optimism improving both after the end of the partial government shutdown in October and in the wake of the two-year budget accord in December. However, the survey revealed that businesses are most concerned about regulations and litigation, with more than one-third of respondents citing the issue as their biggest worry (Market News Feb. 10).
Overall, about one-half of all responses to Moody's nine questions were positive. The all-time average is closer to about one-third of replies.
Three-fourths of those polled said that they expect the economy to improve throughout the first six months of 2014, revealing a forecast more upbeat than the current outlook.
The worldwide difference between all positive and negative responses was 40% last week and 37% on a four week moving average. The same measurement in the U.S. was at 44% last week and 42% on a four-week moving average.
Historically, when less than 10% of responses are net positive, the economy is in recession. Readings between 20% and 30% reveal an economy expanding at potential.