U.S. Firms Feel Pinch From Job Market and Trade

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Businesses are feeling the pinch from a tight labor market and slowing global growth at the same time as fewer are raising goods and services prices, a survey of business economists showed Monday.

Eighty-nine percent of respondents reported difficulty filling high-skill positions, up from 78% in the April survey, according to the National Association for Business Economics. At the same time, difficulty filling low- and mid-skill jobs eased moderately.

While firms continue to thirst for talent, some 73% of domestic companies, said they have made no changes to hiring or investments in response to U.S. trade policy. Within the goods-producing sector, 38% indicated they were delaying investments and 31% of companies said they were putting off hiring. The biggest adjustment among manufacturers was in supply chains, with 56% saying they had to make adjustments because of tariffs.

For the first time in seven years, reductions in prices were as common as increases, indicating scant inflationary pressures. Materials costs rose but increases weren’t as widespread. Thirty percent said materials costs rose over the past three months, down from 39% in April.

“More panelists report falling sales and lower profit margins at their firms over the past three months than in the previous survey,” survey chair Sam Kyei said in a statement.

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