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Career Builder Employment Data: If This Is the GOOD News…

Hoping for a little cheer before leaving work, just read the upbeat sounding article entitled Employers see uptick in hiring in 2010- (Reuters). 
However, I was left finding the intended reassurance somehow, NOT. Kind of like those labels on fruit drinks that say things like "10% Real Juice!" (The other 90% being….?)
Despite the positive tone, the article left me more dismayed.
It states:
U.S. employers expect to hire more new workers in 2010 than they did in 2009, a sign the U.S. recession may be easing its grip, research showed on Tuesday.
One-fifth of employers plan to add full-time, permanent employees next year, up from 14 percent in 2009, according to, an online jobs site that surveyed more than 2,700 hiring managers and human resource professionals.
Just 9 percent said they plan to cut head count in 2010, down from 16 percent in 2009, according to the nationwide survey.
"There's definitely an uptick. The number of employers who say they're going to add full-time workers is up from last year, and that is very good news," said Michael Erwin, senior career advisor at CareerBuilder.
Sounds good. Of course, there are a few clouds:
Salaries and benefits are likely to stay tight, the research found.
Fifty-seven percent of employers expect to see higher salaries for existing employees in 2010, down from 65 percent in 2009. Also, 29 percent plan to increase salaries in offers to new employees, down from 33 percent in 2009.
As to bonuses, medical coverage and matching 401k contributions, the survey found 37 percent of employers plan to cut benefits in 2010, up from 32 percent who trimmed in 2009.
OK, still, a lot better to have the job than not, right? Then came the stunner:
Many employers -- 37 percent -- said they plan to take advantage of the large labor pool and replace low-performing employees in 2010.
Now wait a minute!  If 20% are planning to hire, mostly for lower compensation, and 37% plan on just replacing workers, more often than not at lower compensation packages, the what does that mean? I'm no statistician, but  seems like we've got two possibilities here:
Sucks: If the 20% hiring are part of the 37% that are replacing, then we've got a net zero gain in jobs, and a drop in incomes and benefits – leaving less spending power than before. Remember that US GDP is about 70% consumer spending-so where does that leave GDP?
Really Sucks: If the 20% hiring are somehow distinct from the 37% replacing, then isn't that somehow a 17% net decrease in jobs? With many of those still employed at lower wages? We assume those who have held on are not pressing for raises at this time.
Bad for growth, bad for the dollar, which has rallied recently on improved stimulus exit and interest rate expectations. That's bad for Treasury Bond prices. That's really bad, because when they drop, interest rates go up – the same rates that determine mortgage rates -which are about to be reset ( higher) en masse in 2010 and 2011. Guess what that does to housing and banking, the very industries which lead us into the current crisis and up the current rally?
Now, just to fill out the picture, go read Graham Summers' Watch Bonds, Not Stocks, In 2010, and The Coming Economic Nightmare: Part 1.
Happy New Year!