Optimism improves for more hiring, wage increases

U.S. businesses say that an improving economy will drive them to hire more workers and raise wages this year.

A pick up in sales in the final three months of last year has provided a boost in optimism for the January-March period this year, according to a survey released Monday by the National Association for Business Economics.

{mosads}Overall, 51 percent of those asked said they expect wages and salaries to increase at their companies in the first quarter this year, a big jump from the 34 percent in the last survey.

“Business conditions continued to improve in the fourth quarter of 2014,” said NABE President John Silvia, chief economist for Wells Fargo Securities.

“There are strong expectations for the first quarter, especially for jobs and wages, backed up by strong capital spending,” Silvia said.

“Moreover, price and cost pressures appear to be subdued.”

About 36 percent of employers said they expect their companies to hire more workers, up from 31 percent.

Also, 34 percent said hiring had increased at their firms in the October-December quarter, about the same as reported in the previous two surveys.

Of those asked, 54 percent said that sales were up at their companies in the final three months of last year, up from 49 percent. 

Meanwhile, a majority of businesses — 57 percent — say that dropping oil prices should probably help them more this year.

“For many companies, the great deflation in oil prices was the most consequential economic shock of 2014,” said survey Chairman Jim Diffley, senior director, IHS.

Notably, 85 percent of those asked said that the midterm elections that gave Republicans control of Congress is not expected to have any effect on their capital spending or hiring plans.