HIRING ACTIVITY SOLID IN

MARCH BUT FUTURE IS SOFTER

William Dunkelberg (610) 209-2955
(Based on 575 respondents to the MARCH survey of a random sample of
NFIB’s member firms, surveyed through 3/30/15)

The net percent of owners reporting an increase in employment fell 5 percentage

points to a net -1 percent of owners, down substantially from the recent high of 9
percent in December 2014. The percent of owners cutting jobs rose 1 point to 12
percent while the percent increasing employment fell 4 points to 11 percent. The
jobs numbers will not provide much of a boost to total employment. Overall, the
average increase in workers per firm was 0.18 workers per firm, besting the stats
for January and February which were excellent readings. Those increasing
employment added an average of 2.7 workers while those reducing their
workforce cut an average of 2.3 positions, seasonally adjusted. Fifty percent
reported hiring or trying to hire (down 3 points), but 42 percent (84 percent of
those hiring or trying to hire) reported few or no qualified applicants for the
positions they were trying to fill. Ten percent reported using temporary workers,
down 2 points.
Twenty-four percent of all owners reported job openings they could not fill in the
current period, down 5 points from February which was the highest reading since
March, 2006. Strongly correlated with the unemployment rate (-.89), the March
reading anticipates an increase in the unemployment rate.
A net 10 percent planning to create new jobs, down 2 points but a solid reading.
Not seasonally adjusted, 24 percent plan to increase employment at their firm (up
2 points), and 4 percent plan reductions (unchanged).

Reported hiring was very strong, with a net addition of 0.18 workers per firm,
eclipsing the substantial readings in January and February. In part, this may
reflect heavier hiring in January and February as the NFIB question asks about
employment change over the past three months. For early March suvey
respondents, that reaches back into December. But, the number was one of the
best readings in the last decade. It appears that economic growth has weakened
further from Q4’s rather tepid pace, expected by many to come in below 2
percent at an annual rate. This is not supportive of much job growth, especially
with weak retail sales. But, the jobs number is a “rear view”, covering some
decent months of job growth, surprisingly strong given the weather and union
actions in the western ports. The NFIB data anticipates a weaker job number
than February, closer to 250,000, with a higher unemployment rate (unless
departures from the labor force increase).