Wal-Mart’s 27 new units will employ 4,500 people

New York: For big corporations, the labour recovery is alive, even though overall US hiring has remained lackluster.

The sluggish recovery from the 2007-09 recession, the worst since the 1930s, has inhibited job-market gains, but an analysis of Standard & Poor’s 500 companies shows nearly three out of four hiring — just at a measured pace.

Data from the Labour Department to show the unemployment rate remains high at 8.1 per cent, and wage gains have been slow.

In the past 12 months, headcount at S&P 500 companies increased at a 4.2 per cent rate, Thomson Reuters data showed. The data, however, does not break down where the hiring is taking place, either in the United States or overseas.

“A very broad swath of industries have been hiring people. They just have not been hiring that many people,” said Scott Wren, senior equity strategist at Wells Fargo Advisors in St. Louis. “I’m guessing it would continue at a modest pace.”

Boeing is emblematic of this trend. The company has added several hundred employees this year, mostly in its commercial airplane business in Washington state and South Carolina, but those hires will be offset by reductions caused by government spending cuts.

“We expect to continue hiring in some areas, but we also may reduce in other areas, and that is due largely to government spending cuts that are affecting defence and space programmes,” said Boeing spokesman Peter Pedraza.

While the S&P 500 headcount totals do not show how much of the gains are in the United States as opposed to overseas, a survey over the past week on hiring at the 30 companies that make up the Dow Jones industrial average suggests some expansion is happening in the United States.

Of the 10 Dow companies that responded to questions about their hiring practices in recent months, eight were adding jobs, while two were cutting back.

Wal-Mart said its US operations in the first quarter opened 27 new units that will employ 4,500 people in total, and Alcoa said it is expanding facilities in Iowa and Indiana.

Home Depot in January announced plans to hire 70,000 store associates through the spring and said many of those positions may become full-time ones. In contrast, Hewlett-Packard said last week it planned to lay off 27,000 workers, mostly through retirements.

Job growth for small businesses has been less robust, however. The National Federation of Independent Business, in a recent survey, said as of April that some job creation is occurring but that there is “little improvement on Main Street in optimism or hiring and spending this year”.

Jobless claims, after steady improvement over a period of months, have now risen in seven of the past eight weeks, suggesting some loss of momentum. For Friday’s jobs report, economists surveyed by Reuters forecast overall non-farm job growth — which includes government jobs — of 150,000 workers after a gain of 115,000 in April, the weakest in six months.

According to Thomson Reuters data, S&P 500 technology has seen the biggest boom, with a nine to one ratio for companies increasing job counts.

Internet companies were among those in the S&P 500 showing the strongest job growth, including Amazon, up 67 per cent; eBay, up 57 per cent; Priceline.com, up 47 per cent; and Salesforce.com, also up 47 per cent. Tech giants Apple and Google showed gains of at least 30 per cent. Key to corporate hiring is maintaining revenue growth, but that growth has slowed since last year.

“When companies pause or get a little bit nervous about the macro picture, they tend to postpone their full-time hiring and instead tap the temporary employment market,” said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, whose firm manages about $13 billion in assets.

Revenue growth is tied to economic growth, which has been sluggish. US gross domestic product expanded at a 3 per cent annual rate in the fourth quarter but slowed to a rate of 1.9 per cent in the first quarter of this year.

Hiring would be expected to follow, as labour tends to see its best gains later in an economic recovery. But sluggish growth has held that in check.

“With the uncertainty of the elections, with the fiscal cliff, will corporations feel as confident in the latter part of the year? That’s a very legitimate concern,” said Tobias Levkovich, Citigroup’s chief equity strategist.