US – Employers are not hiring , they squeeze

As the August jobs report on Friday indicated, U.S. employers still aren’t hiring tons of employees on a consistent basis. Recent data from Sageworks, a financial information company, also suggest  companies may have less incentive to absorb some of the slack in the labor market that Federal Reserve officials have highlighted in recent weeks.

Privately held U.S. companies on average have continued to generate higher levels of profit per employee and sales per employee over the last 12 months, according to a financial statement analysis by Sageworks.

Companies on average had sales per employee of $282,063 in the 12 months ended July 31, 2014, compared with sales of $273,897 in the year-earlier period, according to Sageworks’ preliminary data. Companies have consistently boosted that figure in recent years, based on comparable-period data going back to 2009-2010…

“U.S. firms have been able to, on average, squeeze more profit and revenue out of their employees,” Hamilton said. “If companies continue to see that they can increase revenues and profits efficiently using their current workforce, the incentive to hire may be less evident, as each new hire represents an additional overhead cost.”

Chosen excerpts by Job Market Monitor. Read the whole story at Squeeze First, Hire Later: What’s Weighing On Jobs Growth.