WASHINGTON — U.S. companies expect to hire more and fire less as they become more confident that the economy will continue to recover in 2010, a survey released Monday by the National Association for Business Economics shows. The share of companies increasing payrolls rose to 22% from 13% in January, the survey of 68 NABE members conducted between Mar. 25 and Apr. 10 showed. The poll reflects first-quarter 2010 results and the near-term outlook.
“NABE’s April 2010 industry survey confirms that the U.S. recovery from the Great Recession continues, with business conditions improving,” said William Strauss of the Federal Reserve Bank of Chicago.
Although the U.S. economy started to expand again in the third quarter of 2009, it took until March 2010 to see a significant increase in the number of jobs. Nonfarm payrolls rose by 162,000 last month, although some of those gains came from temporary hiring for the 2010 Census.
Expectations for economic growth in 2010 have “improved significantly,” the survey showed. Some 24% of NABE panelists believe the economy will expand by more than 3% this year, while 70% of respondents expect gross domestic product to rise by more than 2.0%.
The share of respondents expecting their firms to add employees over the coming six months rose to 37% from 29% in the January NABE survey. Although an increase, the figure remains fairly low as companies worry about the strength of the recovery. The percentage of firms cutting jobs fell to 13% in April from 28% in the previous survey. On a negative note, the survey found that tight credit continue to hamper business. Despite improvements in the economy overall, a large share of respondents continue to report that credit conditions had a negative impact on their businesses during the first quarter of 2010. The Federal Reserve is this week expected to keep short-term interest close to zero to support what it expects to be a moderate recovery, with unemployment staying over the next year.
