NEW YORK (AP) — A survey of national economists showed more businesses are expecting downsizing at their companies and spending less on expansion for the first time since the pandemic, a sign that efforts by the Federal Reserve to raise interest rates is meeting its goal of slowing down the economy.

However, the survey showed that business owners remain concerned that the Fed’s decisions could put too much pressure on the economy and perhaps push the United States into a recession this year.

The January survey from the National Association for Business Economics (NABE) showed its respondents giving an average of -7 about how much they planned to hire at their firms, down from +8 in October, when it was done. the previous study.

However, due to inflation, the survey showed that businesses still expected to pay more for the workers they kept.

“The results of the January 2023 NABE Business Conditions Survey indicate widespread concern about entering a recession this year,” the organization’s president, Julia Coronado, said in a statement.

To combat inflation, the Fed has raised interest rates aggressively in an effort to slow the US economy without plunging it into recession, known as a “soft landing.” The Fed is expected to raise interest rates again this week, albeit at a slower pace than before, as inflation indicators have subsided in recent months.

One indication that inflation is subsiding is the material costs section of the survey. The NABE study gave a rate of 47 for material costs, 5 points below October and well below July’s 76. Entrepreneurs who expected material costs to drop this year were in the majority.

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