Employers Reduce Salary, Not Staff

In spite of the recent downshift in layoffs, employers still plan to cut costs in 2009. According to Challenger, Gray & Christmas, 52% of human resource executives surveyed have implemented salary cuts or freezes for their companies. The number of employers making permanent cuts has fallen from 56% in January to 43% in the most recent survey. In addition to salary cuts and freezes, employers report they have also initiated other cost-cutting initiatives such as reducing or eliminating tuition reimbursement, introducing furlough programs or forced vacations, and limiting workers’ hours.
Employee Benefit News – June 2, 2009

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Economy
Consumer Confidence Increased Sharply in May

The consumer confidence index increased for the third consecutive month to 54.9 in May, up from a revised reading of 40.8 in April, according to the Conference Board. This is the highest index reading in eight months. The expectations index, which measures consumer outlook on future economic conditions, increased to 72.3 in May, up from 51.0 in April. The present situation index, a measure of consumers’ opinions on current economic conditions, increased to 28.9, up from 25.5 in April. Experts say this increase in the present situation index indicates that current conditions have improved and growth in the second quarter of 2009 is likely to be less negative than it was in first quarter. The monthly consumer confidence survey is based on 5,000 U.S. households.
The Conference Board – April 28, 2009

Pending Home Sales Rise

According to the National Association of Realtors (NAR), the index for pending sales of existing homes rose by 6.7% in April to reach 90.3. This is the index’s biggest increase since October 2001, NAR reported. Economists expected a reading of 85 and are optimistic that the housing sector has finally started to turn around likely due to the $8,000 tax credit available for first-time homebuyers. This index measures current activity against sales activity in 2001, the year the index started. A reading of 100 demonstrates equal levels with that year.
Reuters – June 2, 2009

U.S. Factory Orders Increase

Factory orders rose by 0.7% in April, the second increase in three months, according to a report released by the Commerce Department. The increase followed a 1.9% drop in March. Experts attribute the April increase to a rebound in demand for construction machinery, automobiles, and electrical equipment. Durable goods orders, which make up over half of total factory demand, rose by 1.7%, up from a 2.2% decrease in March.
Bloomberg.com – June 3, 2009

Private Surveys Show Bright Spots in Job Market

A recent survey by the Society of Human Resources reported that more than 40% of employers in the service sectors and 25% of those in manufacturing plan to hire workers in June. This is the highest job forecast for these two sectors in six months. In addition, the Conference Board reported an increase of 250,000 online job ads in May to total 3.37 million. This is the first increase since October 2008 and the biggest jump since October 2006.
The Associated Press – June 9, 2009

Service Sector Shrinks

The Institute for Supply Management’s index on non-manufacturing activity registered at 44.0 in May, up from 43.7 in April. Although a reading below 50 indicates contraction in the sector, the slight increase suggests that the deterioration in the sector may be slowing. Non-manufacturing businesses make up nearly 80% of the U.S. economy. Experts are encouraged that stabilization has begun to take place, but warn that the U.S. economy is not completely out of the woods yet.
CNNMoney.com – June 3, 2009

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ESS
May 2009

The unemployment rate increased to 9.4% in May, up from 8.9% in April. However, job loss eased, with employers cutting 345,000 jobs, the fewest since September. Job loss continued to increase in manufacturing, while construction and service-providing industries saw a decline in job loss. Learn more from the most recent employment report from the Bureau of Labor Statistics.

Major Industry Employment:

• Construction: - 59,000
• Manufacturing: - 156,000
• Retail Trade: - 18,000
• Professional & Business Services: - 51,000
• Educational & Health Services: + 44,000
• Leisure & Hospitality: + 3,000
• Government: - 7,000


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Employment Trends is a publication of Express Services, Inc., Oklahoma City, Oklahoma. © 2009.