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New York. Corporate profits are up. Stock prices are up. So why is nobody hiring?

Actually, many American companies are — just maybe not in America.

They are hiring overseas, where sales are surging and the pipeline of orders is fat.

More than half of the 15,000 people that Caterpillar has hired this year were outside the United States. UPS is also hiring at a faster clip overseas. For both companies, sales in international markets are growing at least twice as fast as domestically.

The trend helps explain why unemployment remains high in the United States, edging up to 9.8 percent last month, even though companies are performing well. All but 4 percent of the top 500 United States corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington research group, says American companies have created 1.4 million jobs overseas this year, compared with less than a million at home.

“There’s a huge difference between what is good for American companies versus what is good for the American economy,” says Robert Scott, the institute’s senior international economist.

American jobs have been moving overseas for more than two decades. In recent years, though, those jobs have become more sophisticated — think semiconductors and software, not toys and clothes.

And now many of the products being made overseas are not coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Meanwhile, consumer demand in the United States has been subdued. Despite a strong holiday shopping season, Americans are still spending 3 percent less than before the recession on essential items like clothing and more than 10 percent less on jewelry, furniture, electronics and big appliances, according to MasterCard’s SpendingPulse.

“Companies will go where there are fast-growing markets and big profits,” says Jeffrey Sachs, globalization expert and economist at Columbia University. “What’s changed is that companies today are getting top talent in emerging economies, and the United States has to really watch out.”

With the future looking brighter overseas, companies are building there, too. Caterpillar, maker of the signature yellow bulldozers and tractors, has invested in three new plants in China in just the last two months to design and manufacture equipment. The decision is based on demand: Asia-Pacific sales soared 38 percent in the first nine months of the year, compared with 16 percent in the United States Caterpillar stock is up 65 percent this year.

“There is a shift in economic power that’s going on and will continue. China just became the world’s second-largest economy,” says David Wyss, chief economist at Standard & Poor’s, who notes that half of the revenue for companies in the S&P 500 in the last couple of years has come from outside the United States

A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. By 2015, for the first time, the number of consumers in Asia’s middle class will equal those in Europe and North America combined.

“All of the growth over the next 10 years is happening in Asia,” says Homi Kharas, a senior fellow at the Brookings Institute and formerly the World Bank’s chief economist for East Asia and the Pacific.

Coca-Cola CEO Muhtar Kent often points out that a billion consumers will enter the middle class during the coming decade, mostly in Africa, China and India. He is aggressively targeting those markets. Of Coke’s 93,000 global employees, less than 13 percent were in the United States in 2009, down from 19 percent five years ago.



Associated Press