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More companies plan to hire, not cut

Nov. 3, 2009

By Megan Keyser
Staff Writer

A recent National Association for Business Economics survey indicates positive trends in the economy and the job market, foreshadowing a possible end to the recession in the next few years.

The survey showed that more companies are planning to hire instead of cut jobs. The survey marked the first time this happened since the beginning of the recession in December 2007. A CNN article also said the survey showed more companies spending than cutting costs -- the first time this has happened since October 2008.

"It's possible that we're reaching the end," said Dr. Kent Gilbreath, professor of economics.

However, Dr. Thomas Kelly, professor of economics and director of the Center for Business and Economic Research, said the change will be gradual because the job market has a tendency to respond to these trends last.

"Jobs are one of the last things to improve," Kelly said. Employer price cuts have been the primary reason for job losses, Kelly said, and people's trust in the improving the economy may take some time.

"There's doubt about when consumers will start spending again," Kelly said.

As the economic recession worsened, employers cut back on employee hours, said associate professor of economics Charles North. Improvements to the job market will be slow because even as the economy improves, employers may increase hours for their current work force before they add new employees.

Gilbreath said improvements in the economy indicate a more hopeful economic outlook.

"The stock prices are reflecting optimism by investors that the economy will begin to improve," Gilbreath said. People have wanted to get back in the stock market before investment prices increase.

However, North said that because the stock market anticipates economic change and the labor market reacts to change, the job market will not see improvement nearly as quickly as other areas of the economy.

Although it is likely to be a while before jobs are quickly and easily found, Kelly said, by this time next year, it should be much easier to get jobs.

However, Gilbreath said students should be prepared to face a difficult job market for up to another two years.

"It's going to be a slow, difficult road for students in the next year or two," Gilbreath said.

The best thing students can do to prepare for the job market is to get as much experience as possible, through jobs and internships, Kelly said.

Gilbreath agreed and said students need to think laterally and increase experience through graduate work and gaining marketable skills.

However, alternatives are available to students for whom graduate school is not an option.

"If you can't go to graduate school, don't be afraid to take any job you can," Gilbreath said. The income and work experience will provide helpful skills in later job searches. Students can also find work through friends and other contacts rather than sending out resumes and applications when trying to get jobs.

During a recession, blind applications are not an effective way to find jobs, Gilbreath said. Although it is unfortunate, personal connections are the best way to find jobs during difficult economic times.

"Who you know is the best determinant," Gilbreath said.

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