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Economy and employment slow, but Nabe report also says inflation is easing

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Survey: 15% of firms report rising employment

The National Association for Business Economics has released the “April 2023 NABE Business Conditions Survey,” which suggests that economic growth may be easing, while employment growth remains slow. However, the survey also indicates that inflation is cooling, with 40% of respondents reporting that prices charged are rising, down from 46% in the January 2023 survey and 49% from a year ago. The panel believes there is more work to be done against inflation as the share of panelists expecting prices to rise in the next three months has increased.

The survey found that 15% of respondents said employment had been rising at their firms over the past three months, while 15% said it had been falling, resulting in a net rising index of zero. This is the lowest net rising index since the July 2020 and October 2020 surveys. For the next three months, 15% of respondents anticipate employment will rise, while 19% expect it to fall, resulting in a net rising index of negative four, an improvement from the negative seven net rising index in the January survey.

The survey also indicates that shortages of skilled labor decreased to 33% from 40% in January, while 11% reported shortages of unskilled labor. Close to half of the respondents reported that their firms are not facing any labor shortages, while 22% expect labor shortages to start to abate in the fourth quarter of 2023 or later.

In addition, for the third consecutive survey, 63% reported rising wages at their firms over the past three months. None expects wages to fall over the next three months, but only 43% of respondents expect their firms’ wages to rise in the next three months—the smallest share since the October 2020 survey.

The panel’s view is nearly evenly split on the probability of the US economy entering a recession in the next 12 months, with 44% indicating more than 50% probability, and 53% suggesting less than or about 50% probability of a recession in the next year.

The survey included 55 business economists and was conducted from April 4 to April 12.

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