An increasing number of top U.S. CEOs are expecting to lay off workers in the next six months as inflation rises and both the jobs market and economy cool, according to Axios.
Of the top U.S. CEOs surveyed, 32% expected to lay off workers in the next six months, up from 27% in the last survey released in June, while only 27% expected to hire more workers in that time frame, down from 47% a year ago, according to a Business Roundtable survey of U.S. CEOs first reported by Axios. The result from the survey comes as the Bureau of Labor Statistics released a report on Wednesday showing that inflation ticked up for the second month in a row, reaching 3.7% in August, up from 3.2% in July. (RELATED: ‘Discouraging’: Small Business Owners Sour On Economy As Inflation Picks Back Up)
“With an economy that is slowing, not stalling, CEOs continue to moderate their plans and expectations for the next six months, particularly in employment,” Business Roundtable CEO Joshua Bolten said, according to Axios.
To reflect the drop in optimism toward future hiring, the Business Roundtable’s CEO Economic Outlook Index dropped 4 points to 72 points, with the long-term average being 84 points, indicating that top CEOs believe the U.S. will see sluggish growth in the coming months, according to Axios.
Hot CPI numbers as expected – inflation accelerated again in Aug; here’s a plain-English, deep dive thread explaining the real-life impact of inflation 🧵… pic.twitter.com/v3vMBJA7jy
— E.J. Antoni, Ph.D. (@RealEJAntoni) September 13, 2023
The labor market showed signs of softening in August, with the U.S. only adding 187,000 new nonfarm payroll jobs while unemployment spiked to 3.8% from 3.5% in July. The number of jobs was revised down in June and July, reflecting further softening, with the U.S. adding a collective 110,000 fewer jobs over those two months than what was previously reported.
U.S. Gross Domestic Product was revised down for the second quarter of 2023, with the economy growing only 2.1% rather than the 2.4% that was previously thought, in another sign of a cooling economy.
High-interest rates, which were put in place to address inflation, have been weighing on the economy, with the Federal Reserve setting the federal funds rate to a range of 5.25% and 5.50% after a series of 11 rate hikes that began in March 2022.
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