Manpower Inc.'s quarterly survey of employers' hiring expectations for the second quarter, released today, finds that 8 out of 10 sectors have reduced their expectations from the first quarter, but 7 of 10 increased plans from a year ago. "Mining and Construction are the only categories [out of 10 sectors] that foresee increases over both last year and last quarter."
Reports last week from the Bureau of Labor Statistics showed a complex pattern of price changes. The consumer price index (CPI), increased by a seasonally adjusted 0.3 percent in January and by 2.6 percent for the past 12 months, the highest annual rate in more than a year. However, the "core" rate, which excludes food and energy prices, was up by only 0.1 percent. Average weekly earnings after accounting for seasonal adjustment and inflation were unchanged from December to January. The producer price index (PPI) for finished goods shot up 1.6 percent, seasonally adjusted, in January, BLS reported. The core PPI was up by 0.9 percent, although the major reason for that exceptionally high number was a cutback in manufacturers' incentives on new vehicles. The message from both of these reports appears to be: there is no overall deflation (falling price level), as some had speculated last fall; the underlying inflation rate is still very mild and probably not increasing; but sharp increases in petroleum prices are likely to eat into consumers' ability to spend on other items.