Is the part-time hiring binge that has inflated job numbers for at least two years about to come to an end?
I think so. More importantly, so do CEOs of large corporations.
In December, a quarterly survey of large corporation CEOs showed a minuscule net of 1% (35% to 34%) of corporations expected an increase in hiring. 31% expected no change.
The latest quarterly survey shows nearly 10% (29% to 38%) of large corporation CEOs expect to reduce headcount. The remaining 33% expect no change.
CEO Economic Survey Details
Let’s dive into the Business Roundtable First Quarter 2016 CEO Economic Outlook Survey for more details.
Key Survey Results
Mixed Bag?
For the fourth quarter in a row, CEO expectations on the economy remain mixed.
CEO expectations for sales over the next six months increased by 8.5 points, and their plans for capital expenditures increased by 7.1 points, relative to last quarter. Hiring plans declined by nearly 10 points from last quarter.
Mixed Bag Not
Is that an ominous report or a mixed bag?
On the surface one can make a claim either way. The business outlook is up huge as are capital spending expectations.
However, CEOs are clueless about where the economy is headed.
CEO Outlook
Notice the perpetually lagging nature of the CEO Economic Outlook.
GDP is a lagging indicator. The aggregate CEOs’ economic outlook is even more lagging. That’s quite a pathetic under-performance.
Jobs are also a lagging indicator.
Battle of Lagging Indicators
In the battle of lagging indicators, results show the CEO hiring index was amazingly coincident with nonfarm payrolls from 2003 until late 2012.
What happened?
Obamacare!
- The newly created Obamacare health insurance marketplaces opened for enrollment on October 1, 2013.
- Starting 2014, citizens were required to have insurance.
- Businesses with 50 or more full-time employees had to offer insurance benefits to their employees.
- Obamacare reduced the number of hours to 30 that it took to be considered a full-time employee.
- Employers cut hours and hired more part-time workers.
Five Consequences
- The hiring binge associated with Obamacare is finally over.
- US job growth will “unexpectedly” slow dramatically now that CEO hiring plans have weakened to the point of contraction.
- Talk of rate hikes will morph into talk of easing.
- The US dollar will sink further.
- Gold, not the stock market, will be the big beneficiary of this “unforeseen” jobs weakness.
If you want a bonus sixth consequence, please add rising anger over the “Broken Social Contract“.
Mike “Mish” Shedlock
Aggregate individual demand is inevitably being reduced by innovation, AI, globalization and the orthodox refusal to look at the data. Look at the cost accounting data….you’re all nascent Wisdomics/Gracenomics advocates.
wisdomicsblog.com
“The US dollar will sink further.”
King Dollar going NOWHERE anytime soon.
Recent weakening due to markets pricing in fewer (no more?) rate increases. But will be trumped by yuan.
China WILL devalue the yuan …. massively.
The coming financial crisis will provide support for $US as safe haven status.
Ding, ding, ding! We have a winner!
That is why the Fed did not and cannot raise interest rates.
With other CB’s moving in the opposite direction that would push the dollar to the moon, and that is deflationary. Let me know how the Fed feels about “deflation” please.
It is an all-out “race to the bottom” now.
Since large corporations provide fewer new jobs than small business, what do those small businesses say about hiring? We’re in a service business and we just went from 60 employees at the end of 2015 to 75 as we speak.
Hmmm. I wonder why many holders of USTs are dumping them? What about the geometric increase of trade now being conducted, not in USDs but in other currencies? How long will the Petro-dollar survive before flat lining?
To be sure, the USD will be a perceived safe haven but only for a brief period until total confidence fails; that point is closer than you think. I would imagine that, within 2 years, the USD will be devalued by at least 60%,either just before, or immediately after the final global economic implosion.
Thank you.
It is people who think like you that make it possible for me to profitably trade my long position in zero-coupon US Treasuries year-in and year-out.
Once again, thank you.
I got your six.
Been long the long bond for YEARS
Not selling till I see the whites of the “10yr yield @ 1%” eyes.
Pingback: Inventory To Sales Ratios Spell Trouble Three Ways | NewZSentinel