Monday, Jan 26, 2009
More U.S. companies project they’ll pare staff in the next six months as pessimism mounts the economy will contract this year, according to a survey by the National Association for Business Economics.
The poll’s net employment reading fell to a minus 22 this month, the lowest level since 2001, from minus 15 in the previous survey in October, the report showed today. More than three- fourths of the participants forecast the economy will shrink this year, twice as many as in the last survey.
Sales and profits are falling as rising unemployment causes American consumers to retrench, signaling companies will need to keep cutting payrolls and investments. Clogged credit markets and the slump in housing also threaten to extend the longest recession in more than a quarter century.
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“The employment outlook for the next six months has weakened further,” Sara Johnson, an economist at IHS Global Insight in Lexington, Massachusetts, said in a statement.
The NABE survey reinforces results from other reports that indicate the recession is worsening. The economy lost 2.6 million jobs last year, the most since 1945, and the government’s monthly payrolls report may show employers cut another half million jobs this month, according to the median forecast of economists in a Bloomberg News survey.