Key Findings

  • About a quarter (27%) of U.S. businesses plan to delay hiring or investment in the next six months, the National Association for Business Economics (NABE) said Monday, highlighting corporate concerns about an uncertain economic outlook and the impact of policy changes such as the Trump administration's trade policies.
  • Nearly three-fifths (59%) of business economists see a recession as the top risk over the next year, while the same proportion listed federal policy changes as one of the top three potential risks in the coming months. NABE noted that in its May survey, 84% of respondents listed a recession as the top risk, when releasing the results of its July business economists survey.
  • Although recession concerns have declined, "against a backdrop of high materials costs and wages, businesses are taking a more cautious approach to hiring and capital expenditures," Emily Kolinski Morris, chief global economist at Ford Motor Company, said in a statement.

Deeper Analysis

According to forecasts by two-thirds of the business economists in the NABE panel, the average U.S. tariff rate could stabilize in a range of 15.8% to 25%.

"While the probability of a recession has declined slightly, a significant portion of panelists still express concerns about uncertainty regarding the implementation and timing of the new administration's policies, including trade policy," Selma Hepp, chief economist at Cotality, said in a statement.

U.S. President Donald Trump said on Sunday that the United States and the European Union have reached a trade agreement aimed at avoiding higher import tariffs. Under the agreement, the EU will pay a 15% tariff on automobiles and other goods imported from the United States. The United States and Japan also announced last week that Japan will pay a 15% tariff on goods exported to the United States.

As of Sunday, new U.S. tariffs and foreign retaliatory measures have pushed the average tariff rate to 18.2% — the highest level since 1934, the Yale Budget Lab said Monday. By comparison, the rate was just 2.5% at the end of last year.

The Yale Budget Lab said Trump's tariffs will raise prices by 1.8% in the short term, reducing the income of an average American household by $2,400. Consumers will face a 39% increase in footwear prices and a 37% increase in clothing prices in the short term.

The Yale Budget Lab also said import tariffs will slow economic growth by 0.5 percentage points in both 2025 and 2026, and the unemployment rate could rise by 0.4 percentage points this year and by 0.7 percentage points by the end of 2026.

According to Hepp, U.S. businesses may be abandoning several plans due to the uncertain outlook for import tariffs.

In the survey conducted from July 2 to July 11, only 2% to 3% of respondents said their companies plan to increase hiring or investment in the United States over the next six months, NABE said.

"Their uncertainty may keep businesses on the sidelines," Hepp said.

NABE said 60% of respondents said their companies had not adjusted prices in the past three months, while 25% expect to raise prices in the next three months.

The 27% of business economists who said their companies plan to delay hiring or investment is a finding that "suggests a wait-and-see attitude that seems to permeate much of this survey," Hepp said during a NABE webinar.