US banks are hiring again

US banks have begun hiring staff again following the recent recovery in US markets, according to employment data published by the US Securities Industry Association (SIA).

The number of jobs in the US securities industry rose by 1% in June to 800,600. This was the highest level since August 2002 and the largest monthly gain for three years.

George Monahan, vice-president and director of industry studies at the SIA, said the increase was a sign of recovery in the industry, which has also posted its two highest-profit quarters in more than two years.

He said: "All evidence is that the industry has finally turned the corner for activity and profitability. Even the 'jobless recovery' itself may be turning the corner." The SIA has forecast industry profits of $15bn (€13.2m) for the year-end, more than double last year's $6.9bn.

However, there have been previous upward monthly spikes in employment during the bear market, which turned out to be preludes to further losses and new lows.

The recent employment improvement follows activity in the fixed-income market, where banks have hired debt specialists, but industry participants are concerned that the debt bubble may burst before the end of the year, forcing a renewed reduction of staff.

But Monahan believes even if the fixed-income market slows, job numbers will not plummet because other business areas, including underwriting and commission from cash trading, have improved. The largest US stock indices posted double-digit returns for the second quarter and touched new highs.

However, fewer securities jobs are returning to New York. Despite a 1.1% improvement in June's employment figures to 163,000, the city's securities workforce is at the same level as in 1994.

Many firms have moved from Manhattan to New Jersey. Monahan said: "This is partly due to New Jersey's cost advantages and partly due to business continuity plans that called for geographical diversity and redundancy following the World Trade Center tragedy."