Companies are increasingly confident the US economy will grow at a modest pace over the next year and are hiring more, according to a survey of business economists.
Nearly one-third of the economists surveyed by the US National Association for Business Economics (NABE) said their companies added jobs in the quarter from April to last month, according to a report released yesterday.
That is the highest percentage in nearly two years. And 39 percent expect their firms will hire more in the next six months.
Such a figure is near the two-year high of 40 percent reached in the January to March quarter.
The hiring increase occurred even though sales and profit growth slowed in the second quarter.
Optimism about future US economic growth increased. Nearly three-quarters of the survey respondents forecast growth of 2.1 percent or more over the next 12 months. That is up from two-thirds in the first quarter survey, released in April, and the most in a year.
The quarterly survey’s results echo much of the recent data tracking the US economy. Growth has been slow in the past nine months, but employers have added jobs at a healthy pace.
Many economists anticipate that the steady hiring will help accelerate growth in the second half of this year.
The NABE surveyed 65 of its member economists between June 18 and July 2. The economists work for companies from a variety of industries, including manufacturing, transportation and utilities, finance, retail and other services.
Only about 35 percent of respondents said sales at their firms increased in the second quarter. That is sharply lower than the 55 percent who reported rising sales in the first quarter. And 15 percent said sales fell, up from 9 percent in the first quarter.
Profit growth also slowed, with only 21 percent of respondents reporting that profit margins increased last quarter, down from 29 percent in the first.
In addition, only 19 percent of economists said their firms were raising wages and salaries, down from 31 percent in April and the lowest proportion since October last year.
Looking ahead, companies are increasingly concerned about higher interest rates. That reflects the jump in rates that took place following US Federal Reserve Chairman Ben Bernanke’s comments in late May that the central bank could slow its bond-buying program later this year. Such purchases are intended to keep interest rates low.
When asked for their biggest concern over the next 12 months, 17 percent of respondents cited rising interest rates. That is a big jump from April, when only 4 percent cited such concerns.
The biggest concern for most companies is the health of the global economy, which was cited by nearly one-third of respondents.