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Anxiety Prevents Hiring by Employers in St. Louis Region

Business leaders are nervous. Despite low interest rates and stimulus spending to boost the economy, few are hiring new employees. Are their concerns legitimate?

Political uncertainity on the national level is one reason cited by businesses for not hiring more people, keeping the unemployment rate high.

Businesses have legitimate reasons for being concerned, said Christopher Waller, a senior vice president and the director of research at the Federal Reserve Bank of St. Louis

During a presentation Monday at the Dialogue with the Fed forum on understanding the unemployment picture, Waller cited the collapse earlier in the day of the so-called Supercommittee, a joint committee tasked with recommending federal deficit reduction steps.

While firms are still trying to sort out what federal health care reform will mean, executives are also contending with an uncertain political situation.

Waller outlined what St. Louis Fed researchers hear when they gather anecdotal evidence from around the Eighth Federal Reserve District.

On the monetary policy side, the Fed has lowered interest rates to near zero to try and stimulate the economy, while tax rates have been lowered and a lot of stimulus money has been spent on the fiscal policy side, Waller said. Yet, neither measure appears to being having much effect on unemployment.

"We don't create jobs," Waller said. "The private sector does."

Businesses, however, are also still contending with a lack of demand for their products. Plus, households are deleveraging and restricting consumption, many still struggling after the collapse of the housing market. 

"Jobs are opening up, but hires are not being made," Waller said.

The St. Louis region is a microcosm of the nation as a whole when it comes to the economy, Waller said. However, in regards to employment, the region has been performing a bit better than the nation.

The , compared to 9 percent for the U.S.

By Brian R. Hookbrhook@brhook.com, (314) 482-7944

Hook is editor of Missouri Journal, which covers the economy across the Show-Me State. For more Missouri news, sign up for a newsletter and follow Missouri Journal on Twitter and Facebook.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Brandon Fry - Local Volunteer November 30, 2011 at 01:01 AM
I am a small business owner of www.airbedpros.com and I recently hired a new employee, 1, and I have a need for many more in the months to come. I hope to have enough growth in the next year to make this happen. It seams the government is going through some growing pains, I'm just not sure that they need to be growing, The private sector does!
Gabrielle Biondo (Editor) November 30, 2011 at 04:26 PM
That's great Brandon! Have you ever thought about blogging for Patch about the ins and outs of running a small business? If you have a minute - send me a quick email at Gabrielle.Biondo@Patch.com. Thanks!

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