Why This Survey Is Important
Due to the fact that a self-sustaining economic
rebound is now hinging on job growth (which I believe will happen over the next
few months), I will pay attention in the weeks and months ahead to any
developments on this front. I should also remind readers that the Federal
Reserve specifically cited the job market in its last policy statement, which
means that both the equity and bond markets will be acutely sensitive to any
upcoming employment data.
Last week, I cited the recent results from the
National Federation of Independent Businesses survey and a buildup in
manufacturing activity (coupled with declining inventories) as potential
positives for the labor market in the months ahead. Today, I would like to focus
on the recent Manpower Employment Outlook Survey for the fourth quarter and add
it to the list of evidence supporting my view that jobs should recover into
year-end–gradually pushing bond yields (which are inversely related to price)
and the S&P 500 higher.
According to the Manpower Employment Outlook
Survey, “the improvement in hiring expectations for the fourth quarter marks a
reversal of the downward trend we have seen in the US survey data since the
beginning of the year….employers report a consistent level of job growth
across the majority of industry sectors and all four regions of the US.” As can
be seen in the chart below, there is a strong correlation between the
forward-looking Manpower Survey and Payroll data. Additionally, the results of
this report are consistent with those of the small business (NFIB) survey I
cited last week.
