Corporate profits are up. Stock prices are up. So why isn’t anyone hiring?

Actually, many American companies are — just maybe not in your community. They’re hiring overseas, where sales are surging and the pipeline of orders is fat.

More than half of the 15,000 people that Caterpillar Inc. 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 U.S. 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 liberal Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have cut the U.S. joblessness rate to 8.9 percent, says Robert Scott, the institute’s senior international economist.

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

U.S. jobs have been moving overseas for more than 20 years. 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 aren’t 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 U.S. has been subdued. Americans are 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 U.S. 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, noting that half the revenue for S&P 500 firms in the last few years has come from outside the U.S.

Take DuPont, which wowed the world in 1938 with nylon stockings. DuPont now sells less than a third of its products in the U.S. In the first nine months of this year, sales to the Asia-Pacific region grew 50 percent, triple the U.S. rate. Its stock is up 47 percent this year.

DuPont’s work force reflects the shift in its growth: The company said its number of employees in the U.S. fell by 9 percent from January 2005 to October 2009. In the same period, its work force grew 54 percent in the Asia-Pacific countries.

“We want our resources close to where our customers are,” says Thomas M. Connelly, chief innovation officer at DuPont.

A key factor behind this runaway international growth is the rise of the middle class in these emerging countries. 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.

 

Copy the Story Link