Inflation worries lower executives’ outlook for US economy: poll
What would you like to know
- Inflation, hiring difficulties and the pandemic are all factors in the deterioration of the economic outlook.
- Earnings expectations are also under pressure.
- The tightening of the labor market is a factor of an anticipated increase in wage costs and fringe benefits.
Inflationary fears and a difficult hiring environment continue to weigh on optimism in the US economy, the American CPA Institute reported this week.
In a recent survey, just 41% of business executives expressed optimism about the U.S. economy over the next 12 months, up from 51% in the third quarter and 70% in the second quarter.
Executives also have a darker view of the outlook for their own organizations, with 58% expressing optimism, down seven percentage points from the third quarter.
The AICPA conducted its latest Business and Industry Economic Outlook Survey from October 26 to November 17 among 628 CPAs who hold leadership positions, such as CFOs or controllers, in their companies.
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The survey is a forward-looking indicator that tracks hiring and business expectations for the next 12 months. By comparison, the US Department of Labor’s November job report, published on Friday, looks back on the hiring trends of the previous month.
Inflation is now the main concern cited by survey respondents, overtaking concerns about the limited availability of qualified personnel.
The tight labor market is a factor behind an anticipated increase in wage and benefit costs, which are expected to rise 4.3% over the next 12 months, the fastest rate since before the 2008 recession and an increase compared to the projected rate of 3.7% last quarter. .
Profit expectations are also under pressure; the expected growth rate for the next 12 months fell to 2.1% from 2.5% in the previous quarter. Revenue growth projections, on the other hand, rose to 4.7% from 4.3% quarter over quarter.
When hiring, 39% of business leaders said their organization was considering hiring immediately, while an additional 15% said they had too few employees but were hesitant to hire.
Forty-four percent of those polled said they saw no improvement in their pool of potential applicants after extended federal unemployment benefits ended in September. About a third said they saw at least a slight improvement.