Tags: Honeywell | hiring | GDP | 3%

Honeywell CEO: We Need GDP Growth of 3% to Increase Our Hiring

By    |   Thursday, 07 March 2013 11:22 AM

Honeywell International CEO David Cote says his company won’t be able to hire more workers until gross domestic product (GDP) growth reaches at least 3 percent.

The economy expanded only 0.1 percent in the fourth quarter, and most economists forecast growth of around 2 percent for this year.

Honeywell is a conglomerate whose products include avionics, automotive turbochargers and thermostats.

Video:
Economist Predicts 'Unthinkable' for 2013

It has only been adding two to three workers for every four or five who depart, Cote tells The Wall Street Journal. And he intends to reduce hiring further, thanks to all the economic uncertainty.

“We’ve become more concerned recently,” Cote says. “If we want employment to grow, we have to have GDP growing more like 3 percent, not 2 percent or less.”

Honeywell cut 1,000 jobs from its U.S. work force last year, bringing the total U.S. headcount to 52,000.

If Honeywell is indicative of the corporate world as a whole, the Federal Reserve isn’t going to be lifting interest rates from their near-record low levels anytime soon.

That’s because the Fed has said it won’t lift rates until unemployment falls to 6.5 percent — from 7.9 percent in January. And if companies are going to wait on hiring until GDP growth reaches 3 percent, that 6.5 percent total may be a long ways away.

Fed Chairman Ben Bernanke acknowledges that the unemployment rate is unlikely to return to normal levels for a few years. “A reasonable guess for 6 percent would be around 2016, about three more years,” he said in congressional testimony last week.

Video: Economist Predicts 'Unthinkable' for 2013

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Honeywell International CEO David Cote says his company won’t be able to hire more workers until gross domestic product (GDP) growth reaches at least 3 percent.
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2013-22-07
Thursday, 07 March 2013 11:22 AM
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