U.S. firms hold off hiring, but not many layoffs:poll
The National Association of Business Economics' industry survey found that 59 percent of the 68 respondents saw no change in their employment levels, up from 49 percent in July. That was the highest percentage since January last year.
The survey was conducted between September 20 and October 5.
About 29 percent of businesses expected to increase payrolls, down from 43 percent in July. Three percent planned to lay off workers, up from zero three months ago.
The findings suggest that job growth will probably remain too slow to lower a stubbornly high unemployment rate that has been stuck above 9 percent.
After adding to payrolls at a brisk pace early in the year, businesses have turned cautious as the debt crisis in Europe and acrimony in Washington over budget policy cloud the economic outlook.
While the euro zone accounts for about two percent of U.S. exports, economists warn the fiscal troubles in the region could trigger a financial crisis that would hit American banks and drag the economy into a new recession.
The NABE survey found that a fifth of businesses had seen a drop in sales because of the European debt crisis, with just under a third expecting the drag to continue through the first quarter of 2012.
Amid the economic uncertainty, businesses are cutting back on capital spending. A third of businesses said they were increasing investment in capital, down from 41 percent in July. About 60 percent planned no changes to their capital spending budgets, up from 53 percent three months ago.
Business spending in equipment and software has supported the weak economy. While businesses are cutting back on capital spending, they still do not believe the economy will slide into recession.
Most respondents expected the economy to grow slowly but not slip back into recession. About 84 percent expected gross domestic product to grow at an annual pace of about 2 percent or less.
(Reporting by Lucia Mutikani, Editing by Andrea Ricci)