The Economy

Survey Predicts Mixed Hiring Rates in July

July was the first month since June 2014 that new-hire pay fell in both manufacturing and services.
Matthew HellerJuly 8, 2016

U.S. hiring rates will be mixed in July, with fewer service-sector companies planning to grow payrolls and more manufacturers adding jobs, according to a survey of human resources professionals.

The Society for Human Resource Management found in its latest Leading Indicators of National Employment (LINE) survey that a net total of 48.7% of manufacturers will add jobs this month, up 2.8 points from July 2015.

In the service sector, a net of 45.8% of service-sector companies expect to hire, down 4.7 points from a year ago.

Employers’ hiring expectations is one of four areas that the LINE report covers. In the area of new-hire compensation, SHRM said a net total of 13.8% of manufacturers raised pay in June, down 1.5 points from June 2015, and a net total of 11.8% of service-sector companies increased pay, down 2.3 points.

It was the first month since June 2014 that new-hire compensation index fell in both sectors when compared with the previous year.

“During the economic recovery, heightened unemployment and a large pool of job seekers have allowed many companies to hold down the wages and benefits they offer new hires in order to control costs,” SHRM said. “Compensation typically improves as hiring increases, but job creation has not risen to the point where wage growth has improved on a widespread basis.”

The survey also found that a net total of 12.9% of manufacturers reported increases in exempt vacancies last month, down 3.2 points from June 2015. In the service sector, a net of 15.6% reported increased vacancies, up 1.4 points from June 2015.

“Changes in the number of job vacancies can be one of the earliest indicators of a shift in the balance between labor supply and demand,” the survey noted.