Small-business job recruiting slower than expected; labor costs surge despite drop in productivity.
Colder weather last month put a dent in retail and home sales, while rising labor costs reignited fears of inflation in the months ahead. Here's a look at this week's economic developments and how they may impact your business.
Recruiting on the Rise
Driven by greater demand for employment in utilities, transportation, and warehousing, online recruiting approached a three-year high in February, Monster Worldwide reported on Thursday.
The online-recruiting firm's monthly employment index rose nine points last month to 177, its highest level since the index was launched in April 2004, the report said. The index is based on results from more than 1,500 Web-based job boards.
Recruiting increased in 19 of 20 industries and 22 of 23 job categories, as well as all nine Census Bureau regions tracked by the index, the report said.
"The significant increase last month is encouraging, and indicates a broad strengthening in online demand among U.S. employers at the midpoint of the first quarter," Steve Pogorzelski, Monster Worldwide's international group president, said in a statement.
Still, private company payrolls rose by just 57,000 in February, the lowest gains since July 2003, according to a national report Wednesday by Automatic Data Processing, a Roseland, N.J.-based payroll processing firm.
Labor Costs Higher
Despite flat growth in productivity, unit labor costs surged by an annual pace of 6.6 percent in the fourth quarter of 2006, the Labor Department reported Tuesday.
The revised gains in unit labor costs -- a measure of the amount paid to employees for a given unit of output -- were the highest in nearly a year, the report said. By contrast, productivity increased by just 1.6 percent, the report said.
Between October and December last year, hourly wages adjusted for inflation rose by 10.5 percent, the report said.
Federal Reserve officials have expressed concerns that rising labor costs will lead to higher consumer prices without corresponding gains in productivity and profits.
Productivity has slowed since 2002 in a year-on-year basis, the report said.
New Orders Drop
Weaker demand for civilian aircraft pushed factory orders down to a six-year low in January, the Commerce Department reported Tuesday.
Overall, new orders fell by 5.6 percent to $383.1 billion, including a 60 percent decline in civilian aircraft, the report said.
The declines included an 8.7 percent drop in orders for durable goods and a 2 percent drop for non-durable goods, the report said.
Excluding transportation, new orders were down 2.9 percent, the report said.
Shipments were also down in January, by 1.2 percent, as were inventories, by 0.2 percent, while the inventory-to-shipment ratio rose to 1.23 from 1.22 in December, the report said.
Pending Homes Sales Down
After rebounding in December, colder weather in January pushed pending home sales down by 4.1 percent, the National Association of Realtors reported on Tuesday.
The group's pending home sales index, which is based on signed contract for home sales that have yet to close, fell to 108.7 from 113.3 in December, the report said.
"The rapid shift in January to frigid air in much of the country had a cooling affect on home shopping that went beyond normal seasonal factors," David Lereah, the group's chief economist, said in a statement.
Chain-Store Sales Up
Colder weather also slowed retail sales and the nation's chain stores, which grew by just 2.5 percent in February, the International Council of Shopping Centers reported Thursday.
The gains were led by an 11.2 percent increase in sales at luxury stores, along with increases at drug stores and wholesale clubs, the report said.
"Typically, February has the second lowest monthly sales volume of the year behind January and often can be affected by adverse weather conditions, which was the case this year," Michael Niemira, the group's chief economist, said in a statement. He added that he expects sales to bounce back in March by about 4 percent.
Jobless Claims Fall
New claims for unemployment benefits fell by 10,000 to 328,000 in the week ending March 3, the Labor Department reported Thursday.
The biggest decreases were in California, Wisconsin, and Pennsylvania, while the biggest increases were in Massachusetts, New Jersey, and Michigan, the report said.