More and more business economists expect companies to cut jobs for the first time since the pandemic. This is a sign that the job market is starting to cool amid an increasingly bleak economic outlook.
That’s according to a new survey released Monday by the National Association of Business Economics, which shows that about 20% of the group’s members expect their companies to reduce hiring in the coming months.
NABE President Julia Coronado, founder and president of Macropolicy Perspectives, said in a statement: “For the first time since 2020, more respondents expect their companies to have fewer jobs in the next three months, rather than more. ‘He said. “Fewer respondents than in recent years expect their company’s capital expenditures to increase over the same period.”
Are tech layoffs a canary for the US job market?
Only 12% of those surveyed expect employment to increase in the next three months. This is less than half of those reporting hiring more workers in the past three months. About two-thirds of respondents reported wage increases in the past three months, which he has not changed since November.
Wage growth has played a major role in stubbornly high inflation, about three times the pre-pandemic average.
Coronado said the results “demonstrate widespread fears that we may enter a recession this year.” According to the survey, more than half of respondents believe he has a 50% or more chance of a recession in the next year.
US job growth cools slightly in December as economy adds 223,000 new positions
The January survey included responses from 60 NABE members and was conducted between January 4th and 11th.
The labor market remains healthy, one of the few bright spots in the economy, but there are signs the labor market is starting to soften in the face of rising interest rates. The economy added just 223,000 jobs in December, the smallest increase in two years, and has seen a number of high-profile tech layoffs in the past month.
Federal Reserve Official has revealed that it expects unemployment to rise as a result of an aggressive rate hike campaign, which could force consumers and businesses to cut back on spending. Updated forecasts from his December meeting at the central bank show officials expect the unemployment rate to rise to 4.6% by the end of the year from his current 3.5%.
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This could mean more than 1 million Americans will lose their jobs this year.