For the first time since the early days of the pandemic, most business economists expect companies to cut jobs in the coming months, according to a new survey released Monday.
Only 12% of economists surveyed by the National Association for Business Economics (NABE) expect their companies to increase hiring over the next three months, down from 22% this fall.
According to a survey conducted from January 4th to January 11th, the percentage of economists who expect to hire workers has reached 19%, and is expected to decline at businesses.
NABE said for the first time since 2020, more respondents expect their companies to shrink rather than expand hiring.
Julia Coronado, president of NABE and president of Macropolicy Perspectives, said in a report that the survey results show “a widespread concern about entering a recession this year.”
The survey found that just over half of business economists responding see the risk of a recession next year at 50% or more, with the biggest risks including rising interest rates and costs.
Layoffs have hit the economy in recent weeks, including one announced Monday by Newell Brands, the parent company of Spotify and Rubbermaid. This follows further significant job cuts by Google owners Alphabet and Microsoft last week.
Despite job cuts, government figures show a historically strong job market. The unemployment rate is lining up at his lowest level since 1969, and initial jobless claims have unexpectedly fallen to their lowest level in 15 weeks.
Other key findings from the NABE survey include:
- Lower expectations for business investment
- Wages increased at most respondents’ companies in the last three months
- Far more companies report shrinking profit margins than in the last three years
The silver lining is that inflation, the biggest problem in today’s economy, continues to ease.
NABE said its material cost index plummeted from a record high last summer to a two-year low. Economists also show that they expect material costs to continue to fall.