Bernanke stated he was watching the labor markets closely, right up to the meeting, and the latest survey further confirms its holding up at least as well as expected, if not quite a bit better.

The headline and lead in, however, continue to indicate a reporting bias toward a slowdown:

U.S. Employers Trim First-Quarter Hiring Plans, Manpower Says

By Bob Willis

Dec. 11 (Bloomberg) — Employers in the U.S. trimmed hiring plans for the first quarter of 2008 as the economy cools, according to a private survey released today.

Manpower Inc., the world’s second-largest provider of temporary workers, said its employment index for January through March fell to 17, the lowest since the first three months of 2004, after holding at 18 for the three prior quarters.

The decline wasn’t large enough to signal employment would slump, suggesting the labor market is holding up enough to sustain consumer spending. Federal Reserve policy makers, who are forecast to lower interest rates later today, are counting on rising wages to help Americans weather the housing recession.

“We’ve kind of pointed down a little, but we didn’t fall off a cliff like we did in other downturns,” Jeffrey Joerres, chief executive officer of Milwaukee-based Manpower, said in an interview. “Companies may not be euphoric about hiring, but they are still hiring.”

Right, so why wasn’t the headline ‘survey doesn’t signal a slump’? The reporting bias has been as strong as I’ve ever seen it.

The survey was in line with the Labor Department’s monthly jobs report issued last week. Employers added a greater-than- forecast 94,000 workers to payrolls in November and the unemployment rate held at 4.7 percent. The economy has created an average 118,000 jobs a month so far this year, compared with 189,000 a month in 2006.

These are not rate cut numbers.

Manpower’s index slumped 8 points in the second quarter of 2001, at the start of the last recession.

Before adjusting for seasonal variations, 22 percent of the roughly 14,000 companies surveyed said they will boost payrolls in the first quarter, down from 27 percent in the previous three months.

Little Change

Twelve percent said they’d trim hiring in the coming quarter, and 60 percent anticipated no change, the survey showed.

The overall index subtracts the percentage of employers planning to cut jobs from those who plan to add workers and adjusts the results for seasonal variations.

The world’s largest economy will expand at a 1 percent annual pace this quarter, bringing 2007’s growth rate to 2.2 percent, according to the median estimate of economists surveyed this month by Bloomberg
News. It grew at a 4.9 percent annual pace in the third quarter and 2.9 percent for all of 2006.

That’s a two quarter average of 3%, as actual employment and output grew modestly and inventory in Q3 borrowed some GDP from Q4. And the fed knows that if recent history is any guide, there is a good chance net exports were higher than expected in Q4 and it could be revised up.

The Fed will probably lower its target lending rate by a quarter point to 4.25 percent later today, its third consecutive reduction, according to a separate Bloomberg survey.

That’s the consensus, and the fed may do it out of fear that if they do not accomodate what markets have priced in, the sky will fall.

Half Limit Hiring

Employers in five of 10 industries polled by Manpower planned to limit hiring next quarter compared with the previous three months. Manpower’s measure of hiring intentions was weakest for construction companies. The index for government agency hiring showed the biggest drop.

And the risks are to the upside, as construction is already near zero. There is no where to go but unchanged or up.

Hiring plans at all but one of the industries were lower than year-ago levels, the report showed. Manufacturers of long- lasting goods, such as computers and appliances, projected little change from the first quarter of 2007.

The hiring outlook is strongest at mining companies, followed by service industries and wholesalers.

Regionally, employers in the Northeast, South and West predict no change in hiring, while employers in the Midwest anticipate a slowdown in activity.

Globally, hiring plans in Peru, Singapore, India, Argentina, South Africa, Australia and Japan were among the strongest, while employers in Ireland reported the weakest hiring plans.

The Manpower survey is conducted quarterly and has a margin of error of plus or minus 0.8 percentage point in the U.S. and no more than plus or minus 3.9 percentage points for national, regional and global
data.

To contact the reporter on this story:Bob Willis in Washington
bwillis@bloomberg.net .

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