The Federal Reserve has conducted interviews with business leaders in the five-state area around Chicago, revealing that non-manufacturing conditions have deteriorated. Although the problem was initially located on the manufacturing side, the outlook for the U.S. economy next year is largely negative, with 60% of respondents expecting a decline in economic activity over the next twelve months.
The report also shows that cost pressures on labor and non-labor spending have eased, and inflation has shown new signs of being under control. Federal Reserve Chairman Jerome Powell has suggested a moratorium on further rate hikes, at least for now. This news comes as Democrats and Republicans in Washington have so far failed to reach a deal to raise the federal debt ceiling, causing concerns over a potential default crisis that could shake the economy.
According to the Fed’s research, negative numbers indicate a below-average growth in business activity, employment, capital spending, and cost pressures or a pessimistic outlook. On the other hand, zero indicates no balance, average growth, or a neutral outlook.