Seventy-three percent of companies polled in a new Manpower survey said their will not hire employees in the second quarter. The Manpower Employment Outlook Survey covers 18,000 companies across all major industry sectors.  The 73% is a record-tying high in the history of the poll.

A few businesses do plan to add workers in the next quarter. The leisure & hospitality industry has a strong outlook and is hiring. So does the professional & business services sector. But, other large groups including construction and education & health services are much less likely to add new people.

The news reinforces the precisions of many economists and the CBO that unemployment in the US will stay close to 10% though the middle of this year. That will almost certainly hogtie consumer spending and activity in the housing market.

There had been some hope, particularly early in the current quarter, that business activity had begun to pick up sharply. It turns out that companies were replacing depleted inventory and that core GDP was not improving in any measurable way. Even the government’s economic stimulus programs have done very little so far to help employment and there is no guarantee that the programs will work at all.

The White House and Congress will take one more at bat to see whether pumping additional aid into the economic system will help job levels. The latest programs will focus on direct credits for businesses that hire, more state aid, and more infrastructure investment. The theory is that these plans will mainline capital to the place where the employment problem is most acute–small and medium-sized business which tend to have limited access to credit.

Tax credits for hiring do not improve employment if companies see no increase in the demand for their products and services. A tax credit for a worker that a company cannot afford means very little. Most businesses still seem willing to keep their workforces where they are, press workers for more productivity, and continue to ride out an economic storm which has still not ended in most parts of the commercial world, no matter what economists say.

Douglas A. McIntyre

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