Plus: Consumer Confidence Rebounds, Manufacturing Tech Demand on the Upswing, $77 Million in Counterfeit Goods Seized and Jobless Claims at 3-Year Low.
2012 Employee Compensation Outlook
Employers expect compensation levels in the United States to increase for both current staff and prospective employees in 2012, as recruiting for skilled talent becomes more competitive, according to CareerBuilder.com’s latest annual employment outlook. In a nationwide survey of more than 3,000 hiring managers and human resource professionals across industries and company sizes, 62 percent of respondents said they plan to increase compensation for their existing employee base while 32 percent will offer higher starting salaries for new employees.
The greatest compensation increases this year are expected for the following job functions: sales (24 percent); information technology (20 percent); engineering (14 percent); and business development (14 percent).
Meanwhile, manufacturers are expected to take a conservative approach to employee compensation in 2012. Manufacturers are projected to increase workers’ salaries by 2.9 percent, in line with employers as a whole, Lena Bottos, VP of compensation and strategic alliances at employee management firm Kenexa, tells IndustryWeek. Much of that compensation will be in the form of merit pay and bonuses — compensation based on performance. In manufacturing, Bottos says, 48 percent of companies will be increasing their merit pay budgets, and 51 percent are increasing their budgets for bonuses.
U.S. Consumer Confidence Surges to 8-Month High
The Conference Board’s Consumer Confidence Index increased 9.3 points to 64.5 in December, following a 14.3-point gain in November. The latest monthly reading marks the highest level of consumer confidence since April and reflects a brightening economic outlook at the start of 2012.
The percentage of consumers who view business conditions as “good” rose to 16.6 percent in December from 13.9 percent the prior month, while those who consider business conditions to be “bad” declined to 33.9 percent from 38 percent. Job market performance has also grown more positive, with the number of respondents claiming jobs are “plentiful” rising to 6.7 percent from 5.6 percent and those saying employment is “hard to get” falling to 41.8 percent from 43 percent.
“Unemployment that dropped last month to its lowest in more than two years and the cheapest gasoline since February are prompting households to take advantage of discounts during the holiday shopping season,” Bloomberg News reports. “The improvement in sentiment may help sustain household purchases, which account for about 70 percent of the economy, into the new year.”
According to a separate report from the Conference Board last month, the index for leading economic indicators (LEI) in the U.S. rose 0.5 percent to 118 in November, following a 0.9 percent increase in October. The continued growth in business activity indicates that the risk of an economic downturn has receded.
“The LEI is pointing to continued growth this winter, possibly even gaining momentum by spring. For the second month in a row, building permits made a relatively strong contribution and there is a chance that the long decline in housing is finally slowing,” Ken Goldstein, an economist at the Conference Board, said. “However, this somewhat positive outlook for the domestic economy is at odds with a global economy that appears to be losing steam. In particular, a deeper-than-expected recession in Europe could easily derail the outlook for the U.S. economy.”
Demand for Manufacturing Tech on the Upswing
As of October, the total year-to-date value of U.S. manufacturers’ machine tool and related equipment orders was $4.53 billion, according to the latest data from the Association for Manufacturing Technology (AMT). That figure marks an 80.5 percent increase over 2010 and is the second-highest value in the last 15 years. As of October, manufacturing technology orders had already surpassed the total value accumulated in 2007.
“American manufacturers rushed to beat the end-of-year bonus depreciation deadline. Inventories were low — something we’ve never experienced going into a recession — and that accounts for the quick rebound,” AMT said in a statement late last month. “Exports are rising as American manufacturers meet overseas demand. Manufacturing technology from the U.S. is less expensive than foreign equipment, and U.S.-made goods are more price-competitive than many imports due to the weak dollar.”
The Midwest and Central regions of the U.S. have seen the greatest surge in manufacturing technology orders, according to AMT. The Midwest’s manufacturing tech orders in 2011 were 105 percent higher than the comparable figure for 2010. This jump was mostly due to the region’s large traditional customer base. Meanwhile, an 85 percent year-over-year pickup in the Central region was fueled by growth in the energy business and the automotive industry.
$77 Million in Counterfeit Goods Seized in Operation
U.S. and Mexican authorities seized nearly $77 million in counterfeit goods in a pre-holiday crackdown, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations announced in December. Investigators swept 66 U.S. cities and 55 Mexican cities as part of the six-week operation, in which 33 people were arrested and charged with trafficking counterfeit goods.
As part of Operation Holiday Hoax II, law enforcement agents targeted ports, shops and flea markets, confiscating more than 327,000 counterfeit items with a manufacturer’s suggested retail price worth an estimated $76.8 million. The counterfeit and pirated items included toys, cell phones and chargers, handbags, DVDs, perfume, integrated circuits, wallets, computer software and sports jerseys.
This was the second iteration of Operation Holiday Hoax. The first, carried out in December 2009, netted more than $26 million worth of counterfeit goods.
“This year’s success during Operation Holiday Hoax was as a result of the close partnership with the governments of Mexico and South Korea…” ICE Director John Morton said in a statement. “Together, we’ve dealt a significant blow to counterfeiters worldwide while making a positive impact on American jobs here at home.”
Jobless Claims at Three-Year Low
New initial jobless claims rose in the latest week reported, following a series of significant declines. According to the U.S. Department of Labor, seasonally adjusted unemployment claims for the week ending December 24 increased by 15,000 to a total of 381,000. However, the four-week moving average — which smooths out volatility — dropped by 5,750 to 375,000, the lowest level since June 2008.
As a general trend, jobless claims have continued to fall from their 2011 peak of 478,000 in April and remain below 400,000, which economists consider the key threshold for improving conditions in the labor market.
“Yet claims reflect only the number of people who lose jobs, not those who find them, so it’s considered an imprecise gauge of hiring trends. Economists say the end-of-year holiday period tends to skew claims because of seasonal factors that are difficult to account for,” MarketWatch explains. “Still, the sharp decline in claims suggests that layoffs have slowed to a crawl and that hiring is on the upswing.”
In particular, the four-week moving average has shown strong long-term improvement, dropping approximately 5 percent in December and 12 percent over the previous six months. In addition, legislative measures are likely to have a significant effect on employment throughout the coming year.
“Americans will be helped by Congress’ decision last [month] to pass a two-month payroll tax cut extension and continue expanded unemployment benefits,” Bloomberg News reports. “Yet fiscal policy uncertainty remains over whether the tax cuts will be extended for the full year and as debate continues over cutting the budget deficit by $1.2 trillion over 10 years.”