Federal Reserve (Fed) Bank of Richmond President Thomas Barkin noted on Thursday that despite an overall improvement in business sentiment through the midpoint of the year, many firms are still not ready to resume a strong pace of hiring. A constant cycle of ever-changing tariffs surpressed the mood of many business operators in the first and second quarters, driving down the pace of hiring.
Key highlights
Business sentiment has picked up in some ways, but not yet on the hiring side.
Businesses still do not seem to be planning layoffs.
Credit card, other data providing a sense that July consumer data may be stronger.
Still early days for companies adapting supply chains to account for tariffs.
Consumers are ready to trade down, may make firms more cautious about passing along tariff costs.
Unemployment rate has been remarkably stable, with slowing growth in job gains matched by slowing growth in labor force.
Businesses have been holding back on hiring so may not have much to cut even if there is pressure on costs.
Underlying dynamics for households still seem strong, given wage gains and employment.