There will be a lot more handshakes between U.S. employers and job seekers in 2013.
Russell Price, an economist at Ameriprise Financial, predicts that employers will hire 2.5 million new workers this year. That's up from 2.2 million new jobs added in 2012 and 1.6 million in 2011. And even 2.5 million might be on the conservative side, Bloomberg reports.
But how can we be sure? Leading indicators are pointing to an improved labor market.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, has identified three leading indicators of the labor market: changes in jobless claims, temporary help and the ability of small businesses to hire the employees they need. All three have improved, with applications for jobless benefits averaging 339,750 a week in the four weeks ended March 16, the lowest since February 2008.
Another sign is that businesses are literally maxing out their workforce. Earlier this year the Federal Reserve Bank of Atlanta surveyed 670 U.S. businesses about their 2013 hiring plans. In the survey the Atlanta Fed found that businesses had fewer employees than normal and they were working more hours than normal.
"These results suggest that some firms are approaching the limit of how far they can go along the intensive margins of effort and hours before they have to hire more workers," economists for the Atlanta Fed said in a blog post. "With effort elevated, as more firms increase average hours worked to above-normal levels, one might expect more hiring to follow."
Businesses can only go so far overworking employees. At some point you need to hire more workers to grow. But, with record profits flowing in (at the expense of workers) who knows how much of a hurry corporations are to hire.
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