Economy

Business leaders' are expecting higher sales and capital spending in the next six months but remain leery of adding workers.

The Business Roundtable’s (BRT) first quarter survey of CEOs shows an improving outlook, up to 81 from 65.6, reflecting an improving economy but one still struggling to grow at a faster pace. 

Although the survey is the best showing since the second quarter of last year, expectations for hiring remain flat, mostly because of continued uncertainty around tax, fiscal and regulatory issues. 

Jim McNerney, BRT's chairman and president and CEO of Boeing, said that economic growth needs to rise to at least 2.5 percent before hiring will pick up.

Small businesses are becoming increasingly optimistic, but their confidence remains at comparatively low levels, an industry index found. 

The National Federation of Independent Business’s optimism index ticked up to 90.8 in February, a 1.9-point increase that the small-business lobby termed “a nice improvement.” 

But NFIB also noted that, even after three consecutive months of improvements, the index remains roughly level with the average in 2008, the year of the fiscal crisis. The index also remains below the levels reached during recessions over the past two decades or so. 

Bill Dunkelberg, NFIB’s chief economist, added that small-business earnings remain low, especially compared to the record earnings currently being reported by large corporations. 

Manufacturers' optimism is on the rise but remains stymied by the nation's troubling long-term fiscal situation, which has been weighing on hiring.

Confidence bounced back to 70.1 percent during the January-March quarter from the lowest level in more than three years during the final three months of 2012, according to a survey released Monday by the National Association of Manufacturers (NAM). 

At the end of last year, with the so-called "fiscal cliff" looming in Congress, manufacturers' outlook on economic conditions sank to 51.8 percent. 

The uptick this year, so far, brings optimism back to levels from six months ago, but leaves some work to be done to reach the 88.7 percent it started out at a year ago. 

"During the election last year, all eyes were on manufacturing, and now we have entered a pivotal year for manufacturers as they try to grow and create jobs to lead our economy," said Chad Moutray, NAM chief economist. 

"It is difficult for manufacturers to gain the certainty needed to hire when Washington continues to move from one crisis to the next with no real solutions to our long-term fiscal problems. For us to see strong manufacturing growth in 2013, we need pro-growth policies from Washington to address these challenges to get our entire economy running on all cylinders."

A strong plurality believe economic conditions are getting worse, with a majority fearing the sequester will add to the hurt.

Women gained 80,000 of the 236,000 jobs added in February, and have now recouped about three-quarters of the jobs they lost during the economic downturn.  

But a women's group is arguing that $85 billion in spending cuts that went into effect a week ago could negate those gains. 

"It is especially troubling that policymakers are undermining progress by allowing program cuts that threaten not only the economic and job security of vulnerable families, but of the entire country," said Joan Entmacher, a vice president for the National Women’s Law Center.

"Congress can stop these senseless cuts and replace them by closing tax loopholes and making smart investments in our future.”

The White House deputy press secretary Josh Earnest said Friday that the Obama administration was "very concerned" that jobs gains in recent months would be reversed by the implementation of the sequester.

"We are certainly concerned — I think you could even say, very concerned, about the habit in Washington, D.C., particularly Republicans in Congress, who repeatedly are throwing up obstacles to a recovery that's starting to gain traction," Earnest told reporters Friday.

The economy added 236,000 jobs last month with the unemployment rate dropping to 7.7 percent, according to a report released Friday by the Bureau of Labor Statistics. The report significantly beat estimates from economic experts, and coupled with a record-breaking week for the Dow Jones Industrial Average, there appeared reason for economic optimism.

Manufacturers say businesses are holding back on hiring because they are frustrated about the nation's fiscal situation and its regulatory environment. 

Despite recent job gains, manufacturers argue that the sector would be creating about 20,000 a jobs a month without persistent headwinds. 

The February jobs report released on Friday showed an addition of 14,000 jobs in manufacturing, although gains were spotty between sectors with the largest gains, for example, in fabricated metal products (up 6,400) while machinery jobs dropped off by 1,800.

"While manufacturing employment appears to have stabilized, it is clear that we could definitely see even better job growth," said Chad Moutray, chief economist for the National Association of Manufacturers (NAM). 

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Unemployment is now at its lowest level of President Obama's presidency. 

Consumers picked up their borrowing by $16.1 billion in January, hitting an all-time high. 

A 10 percent increase in the category that includes student and auto loans drove up the total amount of borrowing to nearly $2.8 trillion, the Federal Reserve reported on Thursday. 

Out of the $16.1 billion increase, $16 billion of that was used for auto and student loans while consumers remained cautious about increasing their credit card use. That follows up an $18.3 billion gain in December.

Credit card spending increased 0.1 percent, or by about $106 million, in January after December registered a 4.4 percent drop.

The House minority leader's comments came in a week when the Dow topped 14,200 for the first time in history.