A National Association for Business Economics survey highlights bad news across the US economy.
The US government will release its monthly jobs report later this week as a business survey finds that hiring by US companies has fallen to a 7-year low and fewer employers are raising pay.
Only one-fifth of the economists consulted by the National Association for Business Economics said their companies had hired more workers over the past three months.
That number is depressingly lower than one-third in July. According to the survey, job totals were unchanged at 69% of companies, an improvement from 57% in July. Yet a large number of job gains fell to their lowest level since October 2012.
Analysts say slower growth of sales and profits are to blame.
They also expect broader economic growth to slow in the coming year, partly as a result of tariffs raising prices and eating into sales for many firms.
Amid concerns over a stumbling economy, the survey revealed that businesses are less likely to offer higher pay, even with unemployment at a 50-year low.
Companies are also reducing their investments in machinery, computers, and other technology. The number of firms increasing their spending on such goods is at its lowest level in five years, according to the survey.
Sales are also growing more slowly. Just 39% of economists said they increased in the past three months, down from 61% a year ago. And only 38% said they expect sales to rise in the next three months.
Tariffs biting into growth
Many economists cite President Trump’s tariffs on steel, aluminum, and wider imports from China as the key factor behind worsening business conditions. Thirty-five percent said the duties have hurt their companies; only 7% said they had a positive effect.
Of those who said tariffs had negatively impacted business, 19% said they had hurt their sales and 30% said they had pushed up costs.
On the positive side, the US economy likely added 90,000 new nonfarm jobs in October, yet this was down 46,000 from September’s tally of 136,000. This would mark the slowest rise since May, and would be well below the average monthly job growth of 161,000 this year.
Two-thirds of the economists surveyed now forecast that the economy will grow just 1.1% to 2% from the third quarter of 2019 through the third quarter of 2020.