With the U.S. economy expected to emerge this year from the longest recession since World War II, business forecasters are feeling a bit less gloomy about the future.
The latest outlook from a quarterly survey being released Monday by the National Association for Business Economics finds that companies are still looking at job cuts in the coming months, though they may be scaling back.
Twenty-eight percent of those surveyed expect their companies to cut jobs through attrition or layoffs in the coming six months, the survey found, compared with 33 percent in April and 39 percent in January.
And some companies are even hiring. Eighteen percent of those surveyed expect their companies to start adding jobs in the coming months, the highest level in a year.
The industry survey “provides new evidence that the U.S. recession is abating, but few signs of an immediate recovery,” said Sara Johnson, NABE’s lead analyst on the survey and an economist at IHS Global Insight. Fifty-six percent of those surveyed expect the gross domestic product to fall by 2 percent or more this year, while only 6 percent project economic growth.
The NABE’s survey of 102 forecasters at companies and trade associations was taken June 19 through July 1.
Even if the recession ends this year as the Federal Reserve and many private economists expect, companies are expected to keep trimming payrolls. The unemployment rate will climb because companies won’t be in any mood to hire until they feel certain a recovery is firmly rooted.
The Federal Reserve last week projected that the national unemployment rate, currently at a 26-year high of 9.5 percent, will pass 10 percent by the end of the year. Most Fed policymakers said it could take five or six years for the economy and the labor market to get back on a path of long-term health.
Meanwhile, the Labor Department on Friday said unemployment topped 10 percent in 15 states and the District of Columbia last month. And the jobless rate in Michigan surpassed 15 percent, the first time any state hit that mark since 1984.
In the NABE survey, there was broad consensus that the worst will be over this year. Eighty-six percent of those surveyed expect sales will hit bottom by the end of this year, while 14 percent see that bottom happening next year or later.
The survey, however, found that credit remains tight. Fifty-four percent of those surveyed found that difficulty obtaining loans had a negative impact on their operations in the second quarter, up from 45 percent in the first three months of the year.