USA Today reported the results of a survey of employers' hiring plans' but managed to misrepresent the results of its own survey. While the article was headlined "more employers plan to hire than fire," and presented a positive picture of the labor market, the survey results actually suggest a further weakening of the labor market.
The survey found that only 35 percent of employers expect to increase staffing in the third quarter, down from 41 percent in the second quarter. (The percent expecting to decrease staffing fell from 8 percent to 5 percent.) This suggests that hiring will slow from a second quarter pace that was already fairly weak, with the private sector adding less than 100,000 jobs in each of the first two months of the quarter.
The survey also indicates that wage growth will slow further, with fewer employers expecting to give wage increases to their workers, and the size of the wage increases expected to be slower. Nominal wage growth has been close to 3.2 percent in recent months, down from 4.0 percent last year. Wages did not keep pace with inflation earlier this year because of the rapid run-up in energy costs. If wage growth slows further, workers will just be keeping pace with inflation even if energy prices stabilize.
Given the relatively low rate of unemployment, this is the time when it would be expected that workers start to receive healthy gains in real wages. This survey suggests that such gains are not likely in the third quarter.
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