Hiring To Hit The Wall Along With Economy

Mish Shedlock is one of my favorite economists, if only because he is right more than he is wrong. His statistical observations here comport with my own anecdotal perspectives of the American workplace, to-wit, the liquidity driven bounce in sales, and thus hiring, is nearing an end. The hiring I have seen has been mostly due to attrition and perceived need to service existing business, as opposed to any sincere belief in the economy. The extension of Operation Twist and ZIRP (the Fed's zero interest rate policy) will do nothing to prop up the economy which appears to want to deflate. Another QE may provide a few weeks' relief, but after that pop the other economists who have been getting it wrong will wake up and observe the obvious -- we cannot solve a solvency problem with liquidity.

Here is Mish's observation:

"Only 23% of US Companies Plan to Hire in Next 6 Months; "Lights Out" Moment Coming Up

According to the latest survey from the National Association for Business Economics (NABE) hiring over the next six months looks grim.

A NABE Poll Shows Fewer U.S. Companies Planning to Hire

Only 23 percent of the firms polled in June plan to add to staff in the next six months, the National Association for Business Economics said on Monday.

NABE's prior survey, conducted in late March and early April, had shown 39 percent of companies planning to add workers.

A July 6 Labor Department report, showed companies asked employees to work longer hours last month, even though they slowed the pace of hiring.

Among companies that produce goods rather than provide services, the impact was even greater, with nearly four in five reporting a Europe-driven decline in revenues.

Three months earlier, only about a quarter of total firms polled thought sales had fallen

Lights Out Moment Coming Up

This report is consistent with my report US Manufacturing ISM Contracts for First Time in Three Years; New Orders and Prices Plunge; Perfect Miss: 0 of 70 Economists Polled By Bloomberg Expected Contraction

Hiring plans are also consistent with the Case for US and Global Recession Right Here, Right Now.

All of a sudden, consumers and businesses alike are going to have a "lights out" moment where orders dry up, hiring dries up, and unemployment heads North.

If the NABE poll is correct (and it is certainly consistent with other data), that time has arrived.

Mike "Mish" Shedlock"


The original article which contains additional links is here: http://globaleconomicanalysis.blogspot.mx/2012/07/only-23-of-us-companies-plan-to-hire-in.html