This Week’s Economic Roundup
Despite signs of economic growth, the nation's small businesses created fewer new jobs in April, putting upward pressure on wages and fueling concerns of inflation. Here's a look at this week's economic developments and how they may impact your business.
Fewer Jobs, Higher Wages
The small-business labor market continues to tighten, with hiring down and wages on the rise in April, SurePayroll reported on Wednesday.
Payroll data from some 15,000 small businesses nationwide showed a 0.12% decline in new hires since March -- the eighth straight month of flat or negative growth, the Skokie, Ill.-based payroll firm said.
Hiring has dropped 0.3% in the 12 months ending April 30, the survey said.
"It does not appear that growth in the economy is giving small businesses enough new business to justify adding new staff," SurePayroll president Michael Alter said in a statement.
It could also mean owners are anticipating a slowdown in economic growth, he added.
At the same time, salaries are going up, rising 0.93% in April to a national average of $30,195.84 -- a 3.7% increase from the same period last year, the survey showed.
Higher salaries force owners to either raise prices or lower profits, Alder said, sparking fears of inflation. Yet, bigger paychecks may also be driving a recent surge in consumer spending, he added.
Personal income rose by $49.9 billion, or 0.5%, in March, compared to 0.3% in February, the Department of Commerce reported Thursday in a downward revision to figures released earlier in the week.
Disposable income also rose in March, by 0.8%, and personal consumption expenditures, by 0.6%, the Department said.
Payrolls across all service-producing industries rose by $19.4 billion in March, while rising by $2.8 billion in goods-producing industries and $2 billion in manufacturing, the report said.
Retail Sales Jump
The return of warm weather and a late Easter holiday boosted April chain store sales to a two-year high, the International Council of Shopping Centers reported on Wednesday.
The gains were led by sales at drug stores, which jumped by 8.1% over the same period in 2005, followed by discounters and apparel and department stores, the report said.
Sales are expected to continue rising this month by up to 3.5%, council president Michael Niemira said.
The gains came despite a 34-cent rise in gas prices throughout the month, hitting $2.92 on Thursday, according to AAA.
Led by a surge in demand for aircraft, machinery, and electronics, new orders at U.S. factories hit a 10-month high in March, the Department of Commerce reported on Wednesday.
Orders for both durable and nondurable goods rose by 4.2%, compared to a revised 0.4% in February, the department said.
Shipments of factory goods also rose, by 0.8%, and inventories, by 0.7%, the report said.