New York: The head of Manpower Inc, one of the world’s largest employment services companies, said its quarterly US hiring survey is not sending recessionary signals at this time.
Manpower’s hiring survey turned sharply lower before the two most recent US recessions, but it is not sending any such signals yet, although a slight downward trend in hiring bears watching, said Jeff Joerres, ceo.
A decline in the US housing market and multi-billion-dollar write-offs of investments in subprime mortgages have led to concerns that the US might dip into a recession.
Manpower, which on 11 December released its quarterly employment outlook, said 22% of US employers plan to boost hiring in the first quarter, while 12% plan to cut staff and 60% saw no change.
Its seasonally-adjusted employment outlook -- which subtracts those cutting jobs from those who are hiring -- was at 17, down from 18 in the fourth quarter and 19 a year ago.
“What companies are saying in the US is ‘I still see demand for my products and services. Of course i’m going to be careful, but I need to hire some people.’ That is not what we were seeing in 2001 going into 2002,” Joerres said.
“Clearly we’re going to see some continued sour news coming out of the housing market and the subprime issue, so if hiring continues it might be able to fend some of that off, and if hiring goes down in a severe way, it points to something very different.”
Both in 1991, and 2001 when the US fell into recession, the Manpower hiring outlook fell abruptly. But with emerging markets performing well and playing a bigger role in the world economy, it’s harder to predict how the next US downturn will play out, he said.
Recent government data indicates slower jobs growth but no sharp decline. Last week, the Department of Labor said the US economy added 94,000 jobs outside the farm sector in November, slightly more than expected.
Joerres said: “The Manpower survey, which dates back to 1962, has been a strong predictor of US job market trends, so the second quarter Manpower survey, due 11 March, may prove to be a turning point.”
The survey does not predict a number but it does predict a macro trend, which says, “you’re clearly going to see some positive job gains in the first three months of 2008”, he said, adding, if it starts to go down a little bit more, you really have a downward pointing trendline, but right now it’s a gradual slope.
US mining and services sectors reported the most optimistic hiring outlook, while slower hiring is seen in construction and education. The finance, real estate and insurance industries reported a weaker outlook.
“The Northeast is really hit the hardest,” Joerres said. “Part of that is what you’re seeing from the credit crunch, but it doesn’t seem at this point to have really affected the demand for products and services in other industries.”
The US Federal Reserve is widely expected to further cut interest rates on 11 December in a bid to prevent the housing slump from dragging down the broader economy.