updated 4/20/2004 2:15:16 AM ET 2004-04-20T06:15:16

The nation’s hiring picture is improving, but worries about an unwanted pickup in inflation are being rekindled as the economic recovery strengthens, a survey of top economic forecasters suggests.

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In the National Association for Business Economics’ April survey, 21 percent of those polled reported employment rising, up from 18 percent in the previous survey in January.

Sixty-five percent in the April survey said employment was unchanged, the same as in the previous survey. And 14 percent reported employment shrinking, down from 17 percent in the January survey.

A government jobs report released this month raised hope that employment may be turning an important corner. After months of lackluster job creation, the economy added 308,000 jobs in March, the most in four years.

The one missing piece in the economic recovery is a sustained turnaround in the labor market, economists say. In general, economists are looking for the economy to create a net 200,000 to 300,000 jobs a month on a steady basis before they pronounce the labor market healed.

“Employment continues on an upswing, driven by prospects of continued solid economic growth. This economy is definitely in a recovery mode,” said NABE’s president Duncan Meldrum, who also is chief economist at Air Products.

“One potential risk in this otherwise positive economic report is the threat of higher inflation — selling prices and materials costs moved noticeably higher during the last quarter,” Meldrum said. “NABE panelists expect price pressures to remain relatively high over the next three months.”

In the April survey, 32 percent reported higher prices being charged for products, up from 29 percent in the January survey.

Sixty percent in the current survey said prices hadn’t changed, nearly the same as in the previous survey. Just eight percent reported prices dropping, down from 12 percent in the January survey.

The government said last week that consumer prices rose by a sharp 0.5 percent in March, a sign that inflation was picking up. That raised the possibility the Federal Reserve may boost short-term interest rates this summer, economists said.

Short-term rates have been at a 45-year low of 1 percent since last June. Economists don’t expect the Fed to raise rates at its next meeting on May 4, but some are calling for rates to start moving higher in August.

NABE’s April survey was conducted between April 1 and April 8 and based on responses of 102 forecasters. A margin of error was not available.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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