The Atlanta Fed/Chicago Booth/Stanford University Survey of Business Uncertainty for May showed clearly that escalating uncertainty is driving falling expectations.
Uncertainty about the growth of sales is keeping sentiment a very weak levels for current conditions, and severely restraining expectations for sales growth in the near term.
While uncertainty about employment is greater, the severity of the increase is less. The converse is also true for employment expectations where these declined in May from April, but only slightly and perhaps no more than might be seen in a normal month-to-month variation.
Interestingly, uncertainty about growth in capital investment was essentially unchanged in May from April and hasn’t looked much changed over the past five or six months. However, expectations for growth in capital investment has been on the decline since February when consumer and business confidence began to take account of the COVID-19 pandemic as a major inhibitor of US expansion and cause of a recession at home as well as abroad.
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