The U.S. labor market outlook is improving, with more employers planning to boost payrolls at the start of 2011 and fewer expecting to cut headcounts compared with the same time this year, a private survey showed today.
Milwaukee-based Manpower Inc., the world’s second-largest provider of temporary workers, said today its employment gauge for January through March 2011 rose to 9 after adjusting for seasonal variations, the highest level in more than two years. The net employment outlook was up from a reading of 5 this quarter.
“Companies are feeling the demand, and they’re getting a bit more confident,” Jeffrey Joerres, chief executive officer of Milwaukee-based Manpower, said in an interview. “On a relative basis we still have a ways to go, but to have this kind of hiring intention coming into the first quarter is positive.”
The report signals companies may be ready to increase hiring, giving incomes and spending a lift. Labor Department figures last week showed payrolls increased by 39,000 in November, while the unemployment rate rose to 9.8 percent, the highest since April.
Seven of every 10 employers surveyed said they anticipated staff levels will be unchanged in the first quarter, little changed from the same period in 2010.
Fourteen percent said they expect to expand payrolls, up two points from this year’s first quarter, while 10 percent projected a drop, down from 12 percent.
Not ‘Robust Enough’
While consumer demand is improving, it’s currently not strong enough nor does it have “the prospect of being robust enough to open the doors to hiring in a bigger way,” Joerres said.
Companies “are more sophisticated than ever before,” he said. “They will do as little anticipatory hiring as possible because it erodes their cost structure too much. They have a better view of when the demand is coming, so they’re able to hire in a more just-in-time fashion.”
Manpower’s index subtracts the percentage of employers planning to cut jobs from those who plan to hire, and adjusts the results for seasonal variations.
Eleven of 13 industries surveyed, including leisure and hospitality and business services, such as accounting and temporary-help agencies, anticipated an increase in first-quarter hiring compared with the prior three months. Construction was the only industry that projected a drop in employment, and the government sector predicted no change.
Employers in the South and Midwest projected the strongest hiring prospects for next quarter. All regions showed gains from last quarter, with the West reporting the biggest increase in hiring confidence.
Manpower interviewed more than 18,000 employers in the U.S. The survey is conducted quarterly and has a margin of error of plus or minus 0.6 percentage point in the U.S.