Louis Basenese pointed out last month that in order for economists to consider the job market healthy, we’ll need initial jobless claims to slide below 355,000. He also said that reaching that number was more attainable than people thought.
He was right. Last week, the number clocked in at 350,000 – the lowest level since March 2008.
However, if this new data out of the National Association for Business Economics (NABE) holds any merit, that number could be on its way up again soon.
According to a survey from the NABE, the amount of U.S. companies that expect sluggish GDP growth has almost doubled from just a few months ago.
Well, It seems that many companies are seeing the uncertainty in Europe as a major red flag, as nearly half of the companies surveyed saw a drop in sales thanks the crisis overseas. As a result, only 23% of businesses are planning to hire new workers. That’s down from 39% just three months ago.
Dr. Nayantara Hensel of NABE explains:
“The goods-producing sector, which encompasses manufacturing in the U.S., agriculture, mining… This was a group that was particularly impacted by the European crisis. And I think that they are one of the areas that’s the most likely to have unchanged employment in the coming months as they’re trying to determine how things are going to work out in Europe.”
Of course, mounting issues in the United States aren’t helping matters, Hensel adds:
“I think there are also a lot of concerns about the fiscal cliff. And if… it does take place, the Bush era tax cuts do expire in December, government spending cuts do happen in early January… [Companies are concerned with] how this is going to impact sales. And since firms just don’t know, they’re much less likely to want to hire than they have been in the past.”