It can be a frustrating exercise these days searching for positive signs in the economy. Newly released survey data from the Federal Reserve Bank of Minneapolis show some good stuff but, really, nothing to convince you a hiring spree is around the corner.
Results from an ad hoc survey of 330 business contacts from around the Upper Midwest (85 percent from Minnesota) in late August show businesses generally upbeat about the near term economy with 85 percent expecting sales revenue to stay the same or increase in the next three months and nearly as many expecting profits to rise or stay about the same.
The Fed got good feedback, too, on credit conditions. Despite ongoing national worries about access to credit, only 8 percent of those surveyed said conditions had deteriorated in the past three months.
And yet, only 21 percent say they expect to add jobs this fall while 10 percent anticipate cuts.
Overall, the survey suggests that while businesses are feeling better about revenues, profits and credit access, they’re still holding back on hiring.
A couple of other charts tell the story of where we are in Minnesota.
Here’s total non-farm employment, seasonally adjusted, the past 10 years.
The cliff dive here hasn’t been as bad as it’s been nationally. Minnesota’s jobless rate stands at 7.2 percent compared to 9.1 percent in the U.S. But, like the nation, we can’t dig ourselves out.
The last chart from the Minneapolis Fed compares employment changes in Minnesota in the current Great Recession compared to 1981, the last Great Recession.
The bounce back in jobs following the 1981 recession was strong and what we’ve come to expect following downturns. The business cycle turns, things improve, companies start hiring again.
This time it’s different. The bounce back is flat. The Fed’s newest survey data offer little hope that a jobs upswing is on the way.