Headlines about a new Duke University economic survey focus on how political worries are driving down corporate optimism. But buried inside the report is good news for people wanting jobs – and those who have them, such as bigger pay raises.

Unemployment is headed under 5 percent, according to Duke business professor Campbell Harvey.

Meanwhile, the quarterly survey from the American Institute of Certified Public Accountants, now projects a 1.1 percent growth in jobs over the next year. That’s more than double the forecast made last quarter.

While this may be good news for job seekers, it’s a challenge for companies who are going to be forced to pay more in wages. Plus. executives are worried about the impact of minimum wage increases.

And in both surveys, the challenge of finding qualified workers surged.

“Business executives have some concern about the talent pool,” the AICPA reported. “Availability of skilled personnel rose two spots to the No. 3 top challenge for businesses in the quarter.”

It’s the second biggest concern now in the Duke-CFO survey, up from fifth.

Corporate execs in the quarterly Duke-CFO Magazine survey expect compensation to increase 3.2 percent in coming months, just 0.1 percent lower than year-over-year.

Hiring is expected to drop slightly to 1.7 percent growth from a year ago, due in part to a difficulty in finding as well as retaining workers and then having to pay them more. (Duke’s Harvey is more bullish on hiring, foreseeing continued hiring at a 2 percent higher rate.)

However, temporary hiring will double to 1.6 percent. compared to June 2015.

Unfortunately for U.S. workers, outsourcing also is forecast to increase, climbing 1.5 percent from 1.1 percent last year.

Wages vs. prices

Overall, Harvey concludes the job picture is putting more pressure on employers who are being squeezed by wages and an expected inability to raise prices on products to keep pace with compensation.

“While the recent disappointing headline non-farm payrolls grabbed a lot of attention [last week], our survey shows the aggregate numbers miss a crucial point. U.S. companies rate difficulty hiring and retaining skilled employees as their second biggest concern — while last year it ranked fifth,” said Harvey.

“Business leaders plan to increase their workforce by 2 percent over the next year, which would reduce the unemployment rate to levels not seen since the late 1960s. CFOs are telling us that expected wage increases (3.3 percent) greatly outpace expected increases in product prices (1.5 percent).”

After the jobs report, the Fed put off any immediate plans for a hike in interest rates. But Harvey said the job market points to “wage inflation” and higher rates.

“The tight labor market, combined with a skills mismatch between what companies want and what they can get, makes wage inflation inevitable,” Harvey said. “This is exactly the type of data that will energize the Fed to be more aggressive in hiking interest rates – despite the recent setback in non-farm payrolls.”

Hanging over all aspects of the economy is the political situation both in the U.S. and abroad, where Europe is facing the prospect of the U.K. leaving the European Union.

“Due to political risk, US CFOs say their firm is holding back on business spending (45% of those polled), making acquisitions (37%), and hiring (34%),” the Duke survey concludes.

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