Hiring expectations for September in the manufacturing sector dropped, according to the leading indicator of national employment index (LINE) report from the Society for Human Resource Management and Rutgers University.

For September, 49.4% of manufacturers plan to hire while 18.0% anticipate cutting staff for a net increase of 31.4%. That compares with net increases of 46.9% in September 2006 and 47.3% in August.

In the service sector, there was a net hiring increase of 44.2% for September. That's up from 41.4% in September 2006, but down from the 47.1% in August.

The report also found a 9.5% net increase in manufacturers raising new-hire compensation in August. That's down from 10.7% in August 2006 and 12.1% in July.

Service sector companies reported a 10.2% net increase in new-hire compensation in August. That's down from 10.6% in August 2006 and 14.1% in July.