More companies reported increased sales in the second quarter of the year, fueling a jump in hiring and pay raises, according to a survey of business economists released Monday.
After a dismal winter in which bad weather derailed the recovery, respondents to the National Assn. for Business Economics survey were much more optimistic about future growth.
The percentage of economists who said they expect total economic output, or gross domestic product, to expand by more than 3% over the coming year tripled to 24% in the latest survey, from 8% in April.
“Following an exceptionally weak first quarter, sales and employment grew during the second quarter, with the majority of survey participants reporting strong expectations for increased economic growth,” said the group's president, Jack Kleinhenz, who also is the chief economist at the National Retail Federation.
About 57% of respondents reported rising sales at their companies in the quarter, up from 53% in the previous survey.
The higher sales led to a significant increase in hiring, echoing the government's recent upbeat jobs reports.
About 36% of respondents said their firms had increased employment in the second quarter, compared with 28% in the April survey.
Salaries also rose.
About 43% of respondents said wages and salaries increased at their businesses in the second quarter. That was up from 35% in the first quarter and more than double the 19% who reported rising wages in July 2013 survey.
Business economists also reported higher prices for their products. A quarter of respondents said their companies had increased prices in the second quarter, compared with 20% in the first quarter.
Rising wages and prices add to inflation pressures being monitored by the Federal Reserve. The Fed's preferred annual inflation gauge rose in May to 1.8%, approaching the central bank's target of 2%.
Despite the increased sales, profit growth was down.
About 27% of respondents reported rising profit margins in the second quarter, a drop from 32% in the April survey.
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