Expectations Lead the Decline
- Although the decline in January gave back all of December’s gains, the biggest decline was seen in expectations for a better economy, down 12 points to a net 0 percent. This is a volatile series and does not necessarily reflect current activity, but should be monitored to see if reduced optimism spills over into plans to expand. A net 13 percent of firms reported now is a good time to expand, down slightly from December’s high.
Continued Improvement in Labor Market
- A net 14 percent of firms reported plans to hire in the next three months. Although this number is down slightly from December’s post-recession high of 15 percent, it is still relatively strong and indicative of positive momentum in the labor market.
- A solid net 25 percent of firms reported higher compensation in January. Although the percent of firms planning to increase compensation softened, it is still fairly strong at a net 12 percent.
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