Posted Dec. 9, 2015 at 6:19 a.m.
Hiring surge could drive jobless rate under 4% in 2016, Duke says
Durham, N.C. — Good news for job seekers: You can expect more “Help Wanted” signs in the New Year.
A surge in hiring could push the U.S. unemployment rate “below 4 percent,” something not since 2000 as companies gear up for business growth in 2016, says Duke University in its latest economic forecast.
There’s good news for wages, too, with pay likely to grown nearly 3 percent.
“Two percent growth in employment could easily push the unemployment rate below 4 percent – a rate that we have not seen since 2000,” said Professor Campbell Harvey of the Fuqua Business School at Duke.
The jobless rate remains 5 percent, although the growing number of people no longer seeking employment is not factored into that rate.
While the U.S. Federal Reserve is expected to raise interest rates in the near future, businesses are still looking to expand, reports the Duke University/CFO Global Business Outlook survey released Wednesday.
Some two thirds of firms are expecting to add workers with an average headcount increase of 2 percent, finance executives told Duke.
Not only are there more jobs coming but companies are going to be paying more, in part because of the competition for talent. Attracting and retaining “qualified employees” is one of executives’ top concerns, the survey says.
Wages are expected to climb 2.9 percent.
Unfortunately for manufacturing-heavy North Carolina, jobs in that sector are projected to decline by 1 percent. Offsetting losses there are growth in services and consulting, construction, retail and wholesale businesses.
UNC Charlotte on Tuesday issued a forecast on Tuesday forecasting that North Carolina’s economy would enjoy “stable growth” in 2016 with companies adding some 110,000 new jobs.
Last week, the American Institute of Certified Public Accountants in its own quarterly survey also predicited continued growth in jobs nationally.
The Duke/CFO forecast is bullish in parts despite lingering effects of an economic slowdown in China and the expected increase in interest rates. Campbell said companies are expecting the interest rate change and have factored it into their planning.
“Next week’s rate decision is a sure thing and attention will shift to the Fed’s next move,” he said in a statement. “The projected surge in employment that CFOs anticipate makes it highly likely there will be additional rate hikes sooner rather than later.”
Duke has conducted the survey every quarter for nearly 20 years.
Some report highlights:
- “U.S. firms will increase capital spending 2.6 percent in 2016, and research and development slightly more than 3 percent. Spending will fall by more than one-third in the energy sector and remain flat in services and consulting, transportation and technology.
- “The most common plans among companies that expect to accelerate spending are repositioning of the firm, replacing obsolete equipment, implementing new technology and expansion due to growth.
- “Business spending will increase by less than 3 percent in Latin America, though it will range from 5 percent in Mexico to a reduction of 5.5 percent in Brazil. Businesses are expected to increase spending by 3.7 percent in Europe and a median 5 percent in Africa and Asia (outside of China and Japan), though in China spending is expected to rise less than 2 percent.”
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