Consider Patrick Shrader, vice president of Arundel Manufacturing, based near Portland, Maine. Shrader said the uncertainty and brinkmanship in Washington have led his company to postpone hiring.
“As soon as we think the dust is settled, and we’re ready to move forward, there’s something else,” he said.
Arundel makes precision metal components for oil and gas drilling equipment, aircraft and semiconductor manufacturers. Defense contracts make up about one-fifth of business.
The company has enough work to support up to 10 hires, on top of its current staff of 80, Shrader says. But it isn’t ready.
“We’re not prepared to bring anybody else on board until we figure out what’s going on after Jan. 15,” he said.
Even as hiring and economic growth have remained tepid in recent months, the stock market has been roaring. Two key reasons: The Federal Reserve’s policies have kept long-term interest rates so low that many investors have shifted out of low-yielding bonds and into stocks, thereby driving up stock prices. And corporations have managed to deliver steady profit growth, in part by keeping costs down.
The economy has been growing at a lethargic pace since the recession officially ended in June 2009. Growth has averaged about 2 percent a year. Job growth since 2010 has averaged about 180,000 a month.
The burst of hiring earlier this year was probably unsustainable without a faster economy, said Sophia Koropeckyj, an economist at Moody’s Analytics. While companies were adding jobs at a healthy pace in the first six months of the year, the economy was expanding at a meager annual rate of 1.8 percent. Brief periods of robust job gains have raised hopes only to fizzle.
The weak economic growth appears to have caught up with employers. They’re now adding fewer jobs. That’s been particularly noticeable among companies that depend on consumers, like restaurants and retail chains.