CEO outlooks brighten with stronger jobs data

Buoyed by increasingly positive employment data, more U.S. chief executive officers project a pickup in sales, capital spending and hiring in the next six months, according to the latest survey by the Business Roundtable.

 
The Business Roundtable’s Economic Outlook Index climbed to 84.5 in the fourth quarter from 79.1 in the previous three months, the Washington-based trade group said today. Readings greater than 50 are consistent with economic expansion, and the group said the index’s long-term average is 79.4. 

“Our expectations are consistent with an economy that will continue along the path of steady, modest recovery into the first half of 2014,” said Jim McNerney, chairman of the Business Roundtable and CEO of Boeing Co. “These soundings are also consistent with an overall economy that, despite progress, is not yet performing at its full potential.” 

Seventy-three percent of respondents project an increase in sales in the next six months, up from 71 percent in the third quarter. The share expecting increased business investment in the next six months jumped to 39 percent in the fourth quarter from 27 percent in the previous three months. 

Thirty-four percent of corporate leaders plan to boost payrolls, up from 32 percent in the third quarter. 

The survey, completed between Nov. 4 and Nov. 21, tabulated the responses of 120 CEOs who belong to the Business Roundable.

Private companies in the U.S. economy added 215,000 new jobs during November, crushing expectations by economists who had estimated a gain of 170,000 new jobs, according to the latest ADP National Employment Report, which was released today ahead of the official U.S. Bureau of Labor Statistics report.

ADP also revised its October estimate upward to 184,000 new jobs from an earlier reading of 130,000.

“According to ADP National Employment Report findings, the U.S. private sector added 215,000 jobs during November making it the strongest month for job growth in 2013,” said Carlos Rodriguez, president and chief executive officer of ADP. “It’s an encouraging sign as we head toward the new year.”

“The job market remained surprisingly resilient to the government shutdown and brinkmanship over the treasury debt limit,” said Moody’s Mark Zandi. “Employers across all industries and company sizes looked through the political battle in Washington. If anything, job growth appears to be picking up.”

The ADP numbers show that “small business” led the way, creating 102,000 new jobs. Next was the group with less than 20 employees, adding 57,000. Service-providing industries added 176,000 jobs in November, up from 156,000 in October. This was the largest gain in the service sector in a year.

The U.S. Bureau of Labor Statistics report will release its report on Friday.

The U.S. economy has added private sector jobs for 44 consecutive months, with private sector employment increasing by a total of 7.8 million over that period. The November number should increase the number of jobs grown to over 8 million in 45 months.

The matched sample used to develop the ADP National Employment Report was derived from ADP payroll data, which represents 411,000 U.S. clients employing nearly 24 million workers across the nation.

To view the full report, click here.

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