US companies reduce hiring to 7-year low

According to a business survey, hiring rates by US companies fell to a seven-year low. In addition, fewer employers are raising salaries for their employees.

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Only a fifth of economists surveyed by the National Association of Enterprise Economics reported that their companies have hired additional workers in the last 3 months, writes Fox Business. For comparison, in July such information was provided by a third of employees.

The total number of jobs has not changed in 69% of companies compared to 57% in July. The broad rate of job growth in the survey fell to its lowest level since October 2012.

Hiring slows as more companies report slower growth in sales and profits. Business experts also expect a slowdown in economic growth next year, partly because duties have led to higher prices and lower sales for many firms.

Perhaps because of concerns about a weakening economy, enterprises are less likely to offer higher wages, even with unemployment at the 50-year low. Only a third of economists said their firms raised wages in the last 3 months compared to 6 more than a month ago.

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Companies are also cutting back on their investments in cars, computers, and other equipment. According to the survey, the share of firms that increase their costs for such goods is at the lowest level in recent 5 years.

Sales are also growing more slowly. Only 39% of economists said sales increased over the past 3 months, compared to 61% a year earlier. And only 38% said they expect sales growth over the next 3 months, also compared to 61% a year ago.

Many business economists have blamed President Trump’s duties on steel, aluminum, and most of China’s imports as a deteriorating business environment. 35% said that duties damaged their companies, while only 7% said they had a positive effect.

Of those who said that duties affected their companies, 19% said they reduced their sales, and 30% said that duties increased costs.

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According to economists surveyed by Refinitiv, the US economy added 90 thousand new jobs in the non-agricultural sector this month, which is 46 thousand less than in September. This is the slowest growth since the addition of 62 thousand places in May and significantly lower than the average monthly increase in 161 thousand this year.

Two-thirds of economists surveyed predict that from the third quarter of 2019 to the third quarter of 2020, the economy will grow by only 1,1-2%. A year ago they were more optimistic: almost three quarters predicted growth of 2,1 – 3% from the third quarter of 2018 to the third quarter of 2019.

The survey involved an 101 economist in companies and trade associations during the period from September 26 to October 14 October 2019.

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