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Executives Forecast Cooling Job Market

job market
CEO | Image by Gorodenkoff

Business executives have expressed a bleak outlook for the U.S. economy and job market, with many expecting low headcounts heading into 2024.

The leaders of roughly a third of U.S. companies plan to reduce their workforce or pause hiring over the next six months, according to the latest Business Roundtable CEO Economic Outlook Index.

This survey, conducted by the association quarterly, provides a forward-looking view of the economy by Business Roundtable member CEOs. The recent results demonstrated a four-point drop in the overall index to 72 compared to the last quarter.

“With an economy that is slowing, not stalling, CEOs continue to moderate their plans and expectations for the next six months, particularly in employment,” said Business Roundtable CEO Joshua Bolten. While two-thirds of our companies intend for hiring to increase or stay the same, roughly a third expect to scale back.”

Overall, 32% of CEOs surveyed expect a drop in headcount, 27% anticipate an increase, and 41% forecast employment levels to remain the same.

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The latest results of the Business Roundtable survey “reflect a continued reduction in CEO plans for hiring, a slight increase in capital spending, and a small decrease in expectations for sales for the next six months,” the report read.

To determine the change in quarterly results, the Business Roundtable assigns each of the three aforementioned categories a value between -50 and 150. Readings below 50 indicate economic contraction and readings at or above 50 suggest economic expansion.

According to the association’s forward-looking projections from Q3, CEO plans for hiring decreased by 11 points to a value of 45, plans for capital investment increased by 1 point to a value of 69, and expectations for sales decreased by 1 point to a value of 103.

Despite objectives by large U.S. companies to scale back or pause hiring over the next six months, 45% of small business owners plan to expand hiring and are still struggling to fill positions, according to Chase Bank’s 2023 Business Leaders Outlook.

“These findings confirm what our bankers are hearing every day from our clients — that despite ongoing concerns about recession, inflation, and staffing, small business owners are optimistic,” said Ben Walter, CEO of Chase Business Banking, in a news release.

“To their credit, they continue to demonstrate an ability to adapt and adjust through the ups and downs of economic cycles,” Walter added.

Regardless, the low number of recent job postings on some job-posting platforms reflects a dim outlook on hiring practices heading into 2024.

According to recruitment data from platform Indeed, the number of job postings is down in all large and mid-size markets by nearly 40% compared to the year before.

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