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Business leaders struggle to have confidence in the US economy, survey says

Tom Regnante, Maryland market executive for JPMorgan Chase. (Submitted photo)

Citing inflation, problems with hiring and retaining employees, and supply-chain issues, business leaders in Maryland and across the country are pessimistic about the economy in the coming year, according to a survey from JPMorgan Chase.

Only 19% of business leaders are optimistic about the economy over the next year, the lowest figure in the survey’s 12-year history. A year ago, 75% of business leaders said they were optimistic about the year ahead.

The survey included input from over 1,500 business leaders, across different job sectors, throughout the entire country. The business leaders’ companies that were a part of the survey ranged from $20 million to $500 million in annual revenue.

Despite the lack of optimism in the current economy, David Kass, clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business does not expect the economy to remain at this state for too long.

“Even if we go into a recession, the Federal Reserve and Congress can act to offset it. Within a year we’ll be out of it. It’s not going to be a recession like the Great Depression that lasted many years.”

Kass also mentioned that the unemployment rate was at 25% during the Great Depression, whereas right now it is at 3.7%.

Worries about the economy come as consumer prices have risen 6.3% over the last year, according to Bureau of Economic Analysis. The nation’s gross domestic product decelerated during the first quarter of 2022, after it rose 6.9% in the final quarter of 2021. The stock market has also taken a hit recently, with major indices officially entering a bear market earlier this summer.

The Fed is widely expected to continue raising interest rates to cool off inflation, actions that many economists fear will plunge the country into a recession.

One of the main challenges facing business leaders is retaining and recruiting employees. Tom Regnante, Maryland market leader for  JPMorgan Chase, said that this problem stems from employees wanting more flexibility.

“We are hearing that employees want more flexibility and higher pay as Maryland’s economy remains fairly stable despite a higher inflationary cycle,” Regnante said.

While only a small percentage of business leaders are optimistic about the short-term economy, 83% of business leaders surveyed expect their company to grow over the next year. This number is slightly down from 2021, when the figure was at 90%.

Kass said the concerns of business leaders are legitimate, but that the business climate overall remains stable.

“Right now, we haven’t faced this inflation problem in 40 years, so maybe we aren’t as used to it as we would be,” Kass said. “A lot of the concern is certainly justified. We need to get through this period, but in my opinion, the pessimism is a bit extreme.”

An earlier version of this story inaccurately quoted a comment by David Kass, who said that “we haven’t faced this inflation problem in 40 years,” not four years, as initially reported.