By Shobhana Chandra (Bloomberg)
June 12 (Bloomberg) -- Employers in the U.S. plan to maintain hiring next quarter at the same pace as in the previous three months, according to a private survey released today.
Manpower Inc., the world's second-largest provider of temporary workers, said its employment index held at 18 percent for July through September, the same as in the second quarter. The gauge subtracts the percentage of employers planning to cut jobs from those who plan to add workers and adjusts the results for seasonal variations.
The report suggests the weakest pace of growth in four years hasn't discouraged employers from expanding payrolls. More jobs and higher wages are critical to sustaining consumer spending as fuel costs climb, house prices stagnate and interest rates rise.
``It's still a relatively stable market,'' Jeffrey Joerres, chief executive officer of Milwaukee-based Manpower, said in an interview. ``Companies are being cautious but continuing to add workers. It helps create optimism among people to continue to spend money.''
The economy has created an average 119,000 jobs a month so far this quarter, compared with 142,000 a month from January though March, according to figures from the Labor Department. The jobless rate held at 4.5 percent last month, close to a five-year low.
Before adjusting for seasonal variations, 29 percent of the roughly 14,000 companies surveyed by Manpower said they will add to payrolls in the third quarter, up from 28 percent in the previous three months. The figure was down from a year ago.
Seven percent said they'd trim payrolls in the coming quarter, and 58 percent anticipated no change from the prior quarter's pace of hiring, the survey showed.
The economy grew at a 0.6 percent annual rate last quarter, the weakest since the last three months of 2002, according to figures from the Commerce Department.
Growth will pick up for the rest of this year, according to economists surveyed this month by Bloomberg News. The economy is likely to expand at a 2.6 percent annual pace this quarter and next, according to the survey's median estimate.
``Employment growth has held up quite well,'' Federal Reserve Bank of Richmond President Jeffrey Lacker said after a speech on June 6. ``There may be some labor hoarding going on, and if so, that is an indication of confidence.''
Three of the 10 industries surveyed by Manpower -- education, durable goods manufacturing and services -- projected an improvement in hiring next quarter compared with the previous three months. Less hiring at retailers and wholesalers led the five industries that said employment would decelerate.
Construction companies, suffering through a second year of a homebuilding slump, and manufacturers of non-durable goods predicted little change in payrolls next quarter.
Demand for workers at commercial projects has helped offset some of the decline in residential real estate to prevent overall construction hiring from falling even more, economists said. Total construction payrolls have fallen by 54,000 since reaching a high of 7.7 million in September 2006.
Compared with a year earlier, employers in most industries were less inclined to add staff, the Manpower data showed.
``Companies are feeling OK about business,'' Joerres said. ``Not robust, but OK.''
Regionally, employers in the West predicted an improved pace of hiring in the third quarter from the prior three months, while those in the Northeast had weaker hiring plans, the Manpower survey showed. Job prospects in the Midwest and South were forecast to be the same as in the prior quarter.
Outside the U.S., employers in all other 26 countries and territories surveyed by Manpower plan to add workers in the third quarter. Hiring activity will pick up in 14 countries and territories compared with the third quarter of 2006.
Globally, Singapore, Peru, India, Argentina, Australia, Japan and Hong Kong were among countries in the survey that reported the strongest hiring prospects for the coming quarter. Employers in Italy, Belgium and France had the weakest hiring intentions.
An acceleration in growth overseas is brightening the outlook for employment abroad, said Joerres.
``Employers in Europe are seeing real growth in demand,'' he said. ``They can't hold off any more and are hiring.''
Within Europe, the employment outlook rose the most in Norway and Germany for the coming quarter, the survey showed. Germany's outlook rose to 13 percent from 10 percent, while Norway's jumped to 22 percent from 14 percent.
India's employment outlook jumped to 39 percent for the third quarter from 31 percent in the prior three months, the survey showed. China's fell to 18 percent from 21 percent and Japan's declined to 16 percent from 45 percent. These figures aren't seasonally adjusted.
The Manpower survey is conducted quarterly and has a margin of error of plus or minus 0.8 percentage point in the U.S. and no more than plus or minus 3.9 percentage points for national, regional and global data.