Business economists say sales, hiring and pay are upBy JIM PUZZANGHERA
Los Angeles Times
July 21. 2014 8:03PM
WASHINGTON — More companies reported increased sales in the second quarter of the year, fueling a jump in hiring and pay raises, according to a survey of business economists released Monday.
After a dismal winter in which bad weather derailed a recovery from the recession, respondents to the National Association for Business Economics survey were much more optimistic about growth.
Economists who said they expect total economic output, or gross domestic product, to expand by more than 3 percent over the coming year tripled to 24 percent in the latest survey, from 8 percent in April.
“Following an exceptionally weak first quarter, sales and employment grew during the second quarter, with the majority of survey participants reporting strong expectations for increased economic growth,” said the group’s president, Jack Kleinhenz, who also is the chief economist at the National Retail Federation.
About 57 percent of respondents reported rising sales at their companies in the quarter, up from 53 percent in the previous survey.
The higher sales led to a significant increase in hiring, echoing the government’s recent employment reports.
About 36 percent of respondents said their firms had increased employment in the second quarter, compared with 28 percent in the April survey.
About 43 percent of respondents said wages and salaries increased at their businesses in the second quarter. That was up from 35 percent in the first quarter and more than double the 19 percent who reported rising wages in July 2013 survey.
Business economists also reported higher prices for their products. A quarter of respondents said their companies had increased prices in the second quarter, compared with 20 percent in the first quarter.
Rising wages and prices add to inflation pressures being monitored by the Federal Reserve. The Fed’s preferred annual inflation gauge rose in May to 1.8 percent, approaching the central bank’s target of 2 percent.
Despite the increased sales, profit growth was down.
About 27 percent of respondents reported rising profit margins in the second quarter, a drop from 32 percent in the April survey.