July NABE

The National Association for Business Economics (NABE) released its July survey after polling 84 companies between June 11th and June 29th.  Their report had some encouraging components to it.  The number of firms expecting to hire over the next six months rose to 39% and is the highest level of anticipated hiring since January 2008.  With unemployment at 9.5%, the news from NABE on hiring is welcomed.  The survey concluded that the economy continued to expand during the months of April through June, and according to William Strauss of the Federal Reserve Bank of Chicago, “NABE’s July 2010 Industry Survey confirms that the U.S. recovery continued through the second quarter, although at a slower pace than earlier in the year.”  This gives us a hint of what to expect for 2nd quarter GDP figure that will be released on the last day of July.  Looking forward, the expectations for growth continue to remain positive but at a slower rate. Only 20% of those polled feel GDP will continue to grow by 3% or more versus 24% in April. The idea of growth at a slower pace parallels what some of the other indicators we follow have been telling us. Our most recent Economic Cycle Research Institute (ECRI) blog titled “’Shrooming,” is one example and was posted on July 21st.  With the hiring trend improving and the expectation that the economy will continue its expansion, albeit at a slower rate, it is time for the NABE indicator to move to the 12 o’clock position.