The number of businesses that see a 50 percent chance or higher of a recession in 2022 has fallen from around two-thirds of respondents in October to just over half this month, according to a new survey from the National Association of Business Economics (NABE).
Businesses pointed to higher interest rates as the biggest downside risks, while identifying lower interest rates, higher labor participation and easing supply chain issues as the biggest upside risks. Overall though, recession fears remain elevated, and job growth expectations are waning.
“For the first time since 2020, more respondents expect falling rather than increased employment at their firms in the next three months," said Julia Coronado, president of NABE and founder and president of MacroPolicy Perspectives LLC, in a news release. "Fewer respondents than in recent years expect their firms' capital spending to increase in the same period.”
At the same time, more firms are reporting falling profit margins.
“Wages rose at a majority of respondents’ firms in the last three months of 2022 and more firms added workers than reduced headcounts," said Carlos Herrera, business conditions survey chair at NABE and chief economist for Coca-Cola North America. "But far more firms than in the past three years reported falling profit margins.
NABE's index for profit margin expectations is now down to its lowest level since mid-2020.
Yet tempering these concerns is a widespread expectation that inflation will continue to fall.
“The panel suggests that inflation may be easing with the outlook for prices charged at its lowest reading since the October 2020 survey, overall,” said Herrera. “Materials costs have drifted down significantly since last July, and more respondents expect falling costs in the next three months.”
James Gallagher, CEO and Co-Founder of GreenLite, discusses the challenges of rebuilding the fire-affected LA area and how permitting complicates the process.
Super Bowl Champion, Julian Edelman, talks Chiefs' conspiracies, his fave TSwift song and his bet for Super Bowl LIX. Plus, the best time for a bathroom break.
Ron Hammond, Sr. Director of Government Relations at the Blockchain Association, breaks down Trump’s plan to strengthen U.S. leadership in financial technology.
BiggerPockets Money podcast is now available on Cheddar Wednesdays at 10am ET! Mindy Jensen shares how her podcast is helping people gain financial freedom.
The social video platform's future remains in doubt, as players scramble to profit from the chaos. Plus: Big oil gets bigger, DOGE downsizes, and tariffs!
Ty Young, CEO of Ty J. Young Wealth Management, joins Cheddar to discuss Trump's moves as he returns to Washington D.C. and how it may affect the U.S. economy.
Starbucks’ decision to restrict its restrooms to paying customers has flushed out a wider problem: a patchwork of restroom use policies that varies by state and city. Starbucks announced last week a new code of conduct that says people need to make a purchase if they want to hang out or use the restroom. The coffee chain's policy change for bathroom privileges has left Americans confused and divided over who gets to go and when. The American Restroom Association, a public toilet advocacy group, was among the critics. Rules about restroom access in restaurants vary by state, city and county. The National Retail Federation says private businesses have a right to limit restroom use.
