Dive Brief:

• A smaller share of companies is passing on higher prices to consumers than at any time since January 2022, and the risk of an economic downturn has receded since July, the National Association for Business Economics said Monday, citing a survey of economists.
• The association’s survey reveals “that the odds of recession have fallen among panelists,” Ford Motor Company Chief Economist Emily Kolinski Morris said in a statement. “While concern over inflation continues to affect hiring and/or investment decisions by many firms, the smallest share of firms since January 2022 is passing on higher prices to their consumers, or are expecting to do so in the next quarter.”
• The share of survey respondents reporting that their companies are offloading some of their cost increases onto customers dropped to 54% from 67% in a July survey, NABE said. The decline “bodes really well for inflation,” CoreLogic Chief Economist Selma Hepp, said in a NABE webcast.

Dive Insight:

The hard-to-predict outcome from the Nov. 5 election and its aftermath is not chilling plans for investment and hiring at most companies and industries, NABE said, citing the survey conducted from Oct. 3 to Oct. 10.

The “presidential election doesn’t seem to be driving hiring or investment decisions for most panelists,” according to Hepp, chair of NABE’s Business Conditions Survey.

Another survey, also noting the murky political outlook, revealed a less positive mood among executives. Most C-suite business leaders (71%) believe that post-election trade and tax policies will hurt U.S. competitiveness regardless of which party prevails in next week’s balloting, PwC found in a mid-September survey.

Roughly three out of four (76%) top executives expect the election will result in a divided , government, and three out of five (61%) forecast recession in the next six months, compared with 49% in June, according to PwC. The consulting firm surveyed 709 CFOs, CEOs and other C-suite leaders.

“Uncertainty is at a historically high level,” the National Federation of Independent Business said this month. U.S. small businesses have more trouble predicting the business climate in the next six months than any time since the federation began measuring their outlook 38 years ago, the NFIB said.

“The election will trigger adjustments to plans once the results are known,” the NFIB said in a report on a monthly survey. “In a few weeks, the picture will become much more certain for Main Street firms.”

Politics has also influenced the economic outlook of U.S. households, according to a University of Michigan survey released Friday.

The Nov. 5 “election looms large over consumer expectations,” Joanne Hsu, director of the university’s consumer survey, said in a statement. While sentiment fell 1% among Democrats, it rose 8% among Republicans, highlighting confidence their candidate will prevail, she said.

Economists consider recession, increased geopolitical instability and higher-than-expected input costs as the largest risks to the outlook, NABE said.

Citing regional conflicts and trade threats, the International Monetary Fund last week cut its estimate for global growth to 3.2% from 3.3% in July.

At the same time, the IMF upgraded its forecast for U.S. growth to 2.8% for this year and 2.2% for 2025, increases from July estimates of 0.2 percentage point and 0.3 percentage point, respectively.

The share of economists who said their companies are less likely to lay off staff during the next six months rose to 19% from 10% in July, NABE said.

More than half of economists (56%) set the odds of a recession during the next 12 months at 25% or lower, NABE said.