Top executives aren’t exactly predicting a storm in the economy. But the weather is getting colder, the skies are graying, and the number of people who want to go out is decreasing.
Federal Reserve Chairman Jerome Powell’s efforts to rein in rising costs without suffocating the labor market have created a period of uncertainty; good news is frequently bad news, and bad news is frequently good news, with financial institutions and large corporations caught in the crossfire. I’m in the middle of it, trying to figure out how to proceed.
The Business Roundtable’s fourth-quarter survey, released on Monday, paints a clear picture of “bad” business confidence in the United States in 2023.
Of course, the majority of executives polled do not believe we are on the verge of a recession. Yes, more businesses are not planning to hire or invest in the coming year. But, as our colleague Victoria Guida so aptly put it, “sentiment” is deteriorating. Concerns are growing about how the federal government will react to economic forces that may force the Fed to raise interest rates.
“The poll results are not surprising given that the Fed has slowed inflation,” said Business Roundtable CEO Joshua Bolten in a statement. “Both Congress and the White House must take action.” More measures are needed to bolster the economy’s “pro-growth” policies.
The problem, of course, is that economic growth contributes to the problem. According to a report by the Institute for Supply Management, service companies remain popular in industries such as healthcare and retail. Factory order has been received.Wages are still rising as companies compete for fewer job losses.
Powell and other Fed officials have said that they plan to raise rates in small steps in the near future. However, a strong job market and steady demand for goods and services may require a more aggressive approach. This should cause the economy to slow. It also explains why CEOs are getting less optimistic even though they checked the box saying they plan to hire more people in the next year.