Gallup: Job Creation On Hold As Employers Remain Cautious

The stalling economic recovery has had job creation on hold for months now, and there's little indication that the labor market is improving, a new survey shows.

Job creation in July wasn't much different than the modest levels reported in May and June, according to the Gallup Job Creation Index. July's index registered +14, the polling organization said Tuesday, nearly on par with June's +15 and matching the +14 posted in May.

And those numbers don't vary much from the +12 to +15 range that's been reported since February.

The good news, Gallup notes, is that job creation is above levels recorded in 2009 and 2010, even though the index remains below those of 2008.

Gallup says that job creation has been best in the Midwest, where the index recorded a +17 in July. That outcome coincides with the recent rise in manufacturing employment that has helped boost economies in Midwestern states such as Ohio, Illinois and Wisconsin.

Gallup bases its score on responses from workers about their employers' hiring or firing actions. July's +14 score is derived from the 32 percent of workers nationwide who said that their employers were hiring and 18 percent who said that their employers were letting workers go.

The survey results suggest that many companies appear to be holding onto their workers, with 18 to 19 percent of workers reporting that their employers let employees go during the first seven months of the year, despite stagnant growth in the economy.


Hiring has also remained relatively flat during the past six months, suggesting that employers are holding back on new hires.

The hesitancy in hiring suggests that companies are concerned that business may fall off in the future, Gallup says, adding, "This reduction in operating visibility seems to be hindering hiring, which is consistent with the weak jobless claims and job growth data that the government has reported in recent months."

Recent economic reports, including unexpectedly low growth in the nation's Gross Domestic Product and a slowdown in manufacturing, further suggest that Friday's jobs report from the Labor Department will show an increase in the nation's unemployment rate, which rose to 9.2 percent in June.

Whether the current stagnation in the labor market has been caused by the year's so far meager economic growth or is an indication of bleaker things to come isn't yet known.

But, Gallup says, a drop in measures contained within its July Economic Confidence Index suggests that it's more likely the latter.

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David Schepp

Staff Writer

David Schepp has spent more than a dozen years covering business news for the electronic and print media, including Dow Jones Newswires, BBC News, Gannett Co., and most recently at AOL's DailyFinance. Nearly 10 years ago, he started writing a weekly People@Work column, looking in depth at issues facing workers in today's workplace. The syndicated column appeared in newspapers and websites nationwide before it made its debut on DailyFinance in 2010. Schepp now continues that tradition at Aol Jobs, covering the jobs beat and providing readers insight and analysis into the nation's challenging employment scene.

Schepp holds a Bachelor of Arts degree in journalism from Metropolitan State College of Denver.

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