The outlook for hiring is improving as U.S. businesses continue to report growing demand and increased profitability, according to a survey of leading economists. In its October industry survey, the National Association of Business Economists said Monday that employment conditions improved in the third quarter to the highest level since the start of the 2008-2009 recession.
Looking ahead, expectations for hiring over the next 6 months rose to the highest level since 2006, according to the survey.
The survey, based on responses from 74 NABE members, also showed that industry demand, corporate profits, business costs and capital spending all strengthened in the third quarter from the second quarter and last year.
William Strauss, an economist at Federal Reserve Bank of Chicago, said in a statement that the survey “confirms that the U.S. recovery from the Great Recession continues, with business conditions improving.“
Despite the positive developments, the recovery is still expected to be slow.
A little over half of the economists in the October survey expect gross domestic product, the broadest measure of activity, to expand by more than 2 percent this year, down from 67 percent in July.
While the overall employment picture appears to be getting better, the job market is expected to remain under pressure into next year.
Earlier this month, NABE economists forecast the unemployment rate to rise to 9.7 percent this year, and then fall to 9.2 percent by the end of 2011. Unemployment in the United States currently stands at 9.6 percent.
Still, the October survey showed the percent of respondents reporting a decline in employment fell to 12 percent, a large improvement from the 31 percent reporting declines a year earlier.
The survey also found that profits at U.S. companies are increasingly being driven by sales in overseas markets, suggesting the weak dollar continues to be a boon for exports.
According to the survey, more than half of respondents indicated that some portion of their firm’s sales came from operations outside the United States, while 16 percent said that over half of their sales came from foreign sources.
Meanwhile, a majority of respondents believe current regulatory policies and federal taxes will be a drag on business next year. However, they also expect the Federal Reserve’s move toward more easy monetary policy will support business in 2011.
The private sector is still struggling to adapt to changes in the regulatory landscape after President Obama signed a sweeping financial reform bill into law earlier this year. In addition, Congress has yet to decide the fate of tax cuts that are set to expire at the end of this year.
At the same time, the U.S. central bank is widely expected to announce additional stimulus measures next month. Fed officials, including chairman Ben Bernanke, have signaled recently that the bank is prepared to pump more money into the economy by purchasing Treasuries.
