The outlook for economic growth has “improved significantly,” according to a survey of economists released today by the National Association for Business Economics. Expectations for employment are also brighter, NABE’s poll shows.
“Employment at respondents’ firms improved significantly in the fourth quarter of 2010, with the employment NRI [net rising index] rising to 28, a 10-point increase over the prior quarter,” the survey reports (see chart below). “This is the highest level for the employment NRI since 1998, and the percent of respondents indicating rising employment at their firms (34%) is slightly higher than the prerecession average. This is quite a turnaround from the January 2010 survey, in which the hiring momentum was decidedly negative (-15 NRI).”
Of the 84 private economists surveyed by NABE, 42% said that employment at their respective firms would increase over the next six months. That’s up from 39% in October and 29% a year ago.
Expectations are one thing; hard numbers are something else. The next opportunity for statistical confirmation (or rejection) in today’s NABE survey arrives later this week, with Thursday’s weekly update of initial jobless claims. Based on the consensus forecast (as per Briefing.com), corroboration of the cheery outlook will have to wait. New filings for jobless benefits are predicted to rise slightly to 410,000 (seasonally adjusted) vs. last week’s 404,000. That’s hardly a tragedy, assuming it proves accurate, but anything north of 400,000 claims fuels worries that the labor market is still struggling.
But there’s always another number waiting in the wings if the stat du jour doesn’t suffice. Next week is scheduled to deliver two employment reports. First up is ADP’s estimate for January payrolls (Wed., Feb. 2), followed in two days by the Labor Department’s report on jobs (Friday, Feb. 4).
Stronger job growth, of course, is exactly what’s lacking at the moment, or so December’s jobs report suggests. Will January offer better news? Even if it does, there are still plenty of challenges to solve, including two rather large weights on the economy’s neck: housing and lending to corporate America.