Plus: U.S. Trade Deficit Expands, Weekly Jobless Claims Dip and Midsize Firms Lower Hiring Outlook.
Trade Deficit Expands in March
The United States trade gap expanded to $51.8 billion in March, a 14.1 percent increase over the revised $45.4 billion total in October, due largely to lower oil prices and surging demand for imported products, according to the U.S. Department of Commerce on Thursday. March exports rose 2.9 percent to $186.8 billion, while imports climbed 5.2 percent to $238.6 billion, the biggest gain since January 2011.
The goods deficit for the month grew to $67.6 billion, a $6.5 billion increase over February, while the services surplus inched up by $0.1 billion to $15.8 billion. Goods exports increased by $4.7 billion to $132.7 billion, led by gains in industrial supplies and materials and capital goods. Goods imports rose by $11.3 billion to $200.3 billion, led by higher demand for capital goods, consumer goods and industrial supplies and materials. Meanwhile, services exports increased by $0.5 billion to $54.1 billion and imports dipped by $0.4 billion to $38.3 billion.
“The March trade shortfall was slightly bigger than analysts’ average estimate of $50.2 billion,” Agence France-Presse reports. “But analysts pointed to the broad-based rise in imports as a positive signal of momentum in the world’s largest economy, where consumer spending accounts for about 70 percent of activity.”
Although imports have been on an upswing, U.S. exports are also performing strongly, increasing in March at the fastest pace since last summer. Exports have risen for the past four months, despite concerns about an economic slowdown in Europe, while U.S. manufacturers have benefited from a weak dollar and slower wage growth, which have kept U.S. goods competitively priced in international markets.
“Economists point out that despite the slowdown in Europe, the Continent accounts for only about a fifth of the market for U.S. exporters,” the Wall Street Journal explains. “They also note that U.S. companies have seen growing demand in emerging economies, including in Latin America and parts of Asia.”
Engineering Salaries Trend Upward
Engineers continued to earn higher salaries in 2011, enjoying a 3.3 percent bump in income over 2010, according to Machine Design’s latest annual survey on engineering compensation.
The average salary for survey respondents – including engineers just starting out, those with 30 years of experience, retired engineers still in it for fun, and largely made up of mechanical engineers (70 percent) – edged up from $83,770 in 2010 to $86,615 in 2011.
“In light of engineering salaries creeping upward, it probably should come as no surprise that only 28 percent of respondents reported their salaries were the same as [reported] last year. Fifty-nine percent reported a 1 to 5 percent increase and 6 percent reported a 6 to 10 percent bump,” Machine Design notes. “A total of 4 percent say their salary dropped in 2011. Sixty-six percent received a bonus, overtime or special compensation last year which amounted to 1 to 5 percent of annual base pay for 43 percent of respondents.”
Comparing average salaries by industry in 2007 with those this year, then calculating the growth in average salaries for each industry, Machine Design found that salaries in the machinery manufacturing segment rose 15.6 percent, while salaries in transportation-equipment manufacturing jumped 18.4 percent. Also showing significant growth during the same period were salaries in electrical equipment, appliance and component manufacturing, which all grew 12.3 percent, and salaries in computer and electronic manufacturing, which grew 14.4 percent.
Approximately 29 percent of respondents have 20-29 years of experience, followed closely by those with 10-19 years of experience (25 percent). Those with 1-9 years under their belt accounted for 21 percent of responses.
Jobless Claims Drop Slightly
New initial jobless claims fell in the latest week reported, easing concerns about the labor market following weak April job creation. According to the U.S. Department of Labor, seasonally adjusted unemployment claims for the week ending May 5 decreased by 1,000 to a total of 367,000, the lowest level in a month. The four-week moving average, which smoothes out short-term volatility, fell by 5,250 claims to 379,000.
“Claims are returning to levels reached in February and March, indicating a surge last month probably reflected difficulty in adjusting the data for an Easter holiday that came earlier this year than last,” Bloomberg News notes. “Declines in dismissals point to a brighter labor market that would help sustain consumer spending after payroll growth slowed last month.”
The latest drop came as a surprise, as economists surveyed by Reuters had expected jobless claims to rise to 369,000 for the week. Although jobless claims have generally trended downward so far this year, some of the recent volatility may have been due to unseasonable weather that affected monthly hiring patterns.
“The prevailing view is that the economy is still growing and adding jobs, but only at a moderate rate that’s slow by historical standards this long after a recession’s end,” MarketWatch explains. “Analysts are watching to see if the economic deterioration and political turmoil in Europe will start to act as a drag on the U.S. in coming months.”
Midsize Firms Lower 2012 Hiring Outlook
While jobless claims fell slightly in the latest week reported, executives at midsize U.S. companies are less optimistic about their hiring plans than they were a year ago as they adapt to managing uncertainty, a new report indicates. In Deloitte’s latest Mid-Market Perspectives report, the percentage of midmarket executives expecting to grow their U.S. workforce dropped from 48 percent in 2011 to 42 percent.
In its survey of 528 U.S. executives, Deloitte found that 86 percent of respondents believe that continued uncertainty is tempering their expectations for economic growth.
“Because of the significantly slower growth than we’ve seen in previous recoveries, mid-market executives are increasingly cautious about their expectations for 2012,” Tom McGee, national managing partner of Deloitte Growth Enterprise Services, said in an announcement of the findings. “Mid-market companies are now trying to meet the challenges of this volatile economy by taking a more adaptable approach to managing certain key business fundamentals.”
Despite still-high unemployment, every executive interviewed acknowledged some difficulty finding skilled talent in certain categories, especially in engineering, health care and information technology.
Rather than adding headcount, more companies (51 percent) plan to invest in their existing workforce through training compared to last year (34 percent).