A recent survey from the National Association for Business Economics (NABE) revealed that only 23 percent of US companies are planning to hire new employees in the next six months. This information is contributing to fears of a “lights out” moment for the US economy, according to the poll:
NABE’s prior survey, conducted in late March and early April, had shown 39 percent of companies planning to add workers.
A July 6 Labor Department report, showed companies asked employees to work longer hours last month, even though they slowed the pace of hiring.
Among companies that produce goods rather than provide services, the impact was even greater, with nearly four in five reporting a Europe-driven decline in revenues.
Three months earlier, only about a quarter of total firms polled thought sales had fallen.
The economic problems that Europe has been experiencing over the last year may have a tremendous effect on American unemployment. When employers can no longer sell their goods (partially because of a lack of buyers in Europe) they are likely to cut workers.
The massive dip from 39% in April to 23% now could indicate a weakness of polling data. Or, it could indicate that the severity of the European crisis is having a real impact. The new poll shows that 47 percent of companies responding believed their sales had dropped due to the European financial crisis. Only 25 percent believed that to be true when responding in April.