Job Market, Economy Continue to Improve

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Things are (slowly) looking up. According to a new survey of American economists released by the National Association for Business Economics on Monday, economic conditions improved in the third quarter to the highest level since the start of the recession.

Additionally, expectations for employment during the next 6 months rose to the highest level since 2006.

“[The survey] confirms that the U.S. recovery from the Great Recession continues, with business conditions improving,” William Strauss, an economist with the Federal Reserve Bank of Chicago, said in a press release.

Industry demand, profits, costs, employment and capital spending strengthened compared to the association’s July report. In the new report, 59% of NABE panelists saw an increase in demand at their firms and 39% of panelists, the highest proportion thus far in the economic recovery, reported an uptick in profits, with profit margins increasing for a fifth consecutive quarter.

The survey also showed that the portion of respondents reporting a decline in employment fell to 12%, down significantly from the 31% reporting declines in October 2009. According to the survey, the majority of firms that have shed workers or plan to cut staff has fallen substantially during the past year and job creation trends are holding steady at healthy levels.

“Outside of skilled labor, no significant amount of shortages was reported,” Strauss said. “An improved outlook for hiring over the next six months was reported, with the best reading this year.”

Currently, the national unemployment rate is 9.6%, where it has hovered for three months in a row.

The survey, however, wasn’t without its gray spots. A little more than half of the economists in the October survey expect gross domestic product, the broadest measure of economic activity, to expand by more than 2% this year, down from two-thirds of respondents who expected such growth in July, an indication that any growth will likely be slow growth.

Additionally, the costs of materials and labor are expected to rise, a problem that most firms can’t keep from affecting consumers. The percentage of respondents reporting rising prices outpaced that of respondents reporting price declines. Less than one-tenth of those surveyed plan on cutting prices in the final three months of the year.

NABE interviewed 74 of its members to between September 21 and October 6 on business conditions in their firm or industry. The data applies to the third quarter of 2010 as well as the near-term outlook.

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