Economists predict short-lived hiring slump
Monday, April 09, 2012 9:49 AM
The March setback in hiring will prove temporary as the U.S. economy, in its third year of expansion, now is better equipped to overcome a slowdown in Europe and rising fuel costs, according to economists, Bloomberg reported.
Growing sales and profits may give business leaders the confidence to take on staff at a faster clip than last month's 120,000 gain in payrolls, according to analysts at JPMorgan Chase & Co. and Deutsche Bank Securities Inc.
They say the data don't signal a repeat of 2010 and 2011 -- when hiring was derailed after promising starts by concern about government debt, energy costs and natural disasters -- even though the total was weaker than all the estimates from 80 economists surveyed by Bloomberg News.
That sentiment isn't universal, with economists at Bank of America Corp. among those projecting employment will slump in the second half of the year as the government prepares to put the brakes on spending to tame the budget deficit.
Deutsche Bank economists counter that income gains will unleash increases in household spending and hiring that will boost job creation by an average of at least 200,000 a month for all of 2012.
"While the economy is going to do OK, we think jobs are going to be doing better than OK," said Bruce Kasman, chief economist at JPMorgan.
The main reason Kasman, a former researcher at the Federal Reserve Bank of New York, remains optimistic is that gains in revenue will outstrip what may be "modest" increases in wages, meaning companies have incentive to boost employment as sales improve. Read more.