CFOs Expect Hiring to Drive Unemployment Below 8%

Chief financial officers have become more optimistic about U.S. employment growth, expecting the unemployment rate to drop below 8% this year.

Respondents to the latest quarterly Duke/CFO Magazine Global Outlook survey expect U.S. employment to increase by 2.1% over the next year, up from 1.5% they predicted last quarter. At that rate, national unemployment should decrease to under 8% by the end of the next 12 months.

More than two-thirds of U.S. CFOs said they are actively trying to fill vacant job slots in multiple departments at their companies."CFOs are feeling more confident about the year ahead," said Kate O'Sullivan, senior editor at CFO Magazine, in a telephone interview.

"This rebound is encouraging because increases in CFO optimism have historically preceded improvements in the overall economy," said John Graham, a professor of finance at Duke's Fuqua School of Business and director of the survey.

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Increases in CFO optimism have preceded improvements in the economy

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According to the survey, almost half of U.S. CFOs have had a difficult time filling open positions over the past year. As a result, 60% said they would recruit more actively, while 35% will hire a junior person and train them and 34% will raise the offered salary.

The survey polled 847 CFOs from global public and private companies across a broad range of industries, including manufacturing, banking, media and transportation, about their expectations for the economy.

Unlike their U.S. counterparts, CFOs in Europe plan further layoffs this year and expect to reduce workforces by 1.5%. Still, almost half believe this year will be a better year than last when the Greek debt crisis griped eurozone economies. "Optimism also rebounded in Europe and Asia, suggesting that 2012 should be a better year than 2011," said Graham. "Still, European optimism lags behind the rest of the world."

Asia is still a good option for jobseekers. CFOs there expect employment to grow in Asia at a rate of nearly 4%, somewhat lower than the 5% they predicted last quarter. Wages are expected to grow by 8% in Asia over the year as companies vie for qualified talent.

"The wage growth shows how competitive the labor market is," Sullivan said. "Companies are trying to attract and retain people. Their optimism has bounced back."

Write to Julie Steinberg at Julie.Steinberg@dowjones.com