Weekly Economic & Business Outlook

Red Flags Rising: Indicators Suggest Faltering Economy

Is the economy starting to soften? Recent concerning signals have been flagged that could suggest so. The Conference Board Consumer Confidence Index declined from 105.3 to 98.3 in February, the largest single month drop since August 2021. Notably, the seven-point decline exceeded experts’ predictions of a contraction to 103, highlighting public anxiety over economic direction—especially inflation. Similarly, the Federal Reserve Bank of New York Survey of Consumer Expectations found that expectations in growth in household spending also decreased, down 0.4% to 4.4% in February, the lowest reading since January 2021. As the principal driver of GDP growth, a decline in consumption could hurt businesses as households moderate their spending. 

A spike in jobless claims also exceeded predictions, rising to 242,000, mostly attributed to inclement weather. It is likely too early to tell what impact, if any, aggressive tightening within federal agencies will have on softening the labor market, but it is a factor to monitor. As of March 3, the Atlanta Fed estimates that GDP will contract by 2.8% in Q1, largely due to declines in personal consumption and business investment, as well as the 26% increase in the trade deficit in January, as business rush to stock up on goods ahead of rising tariffs and the costs they impose.

With mounting uncertainty, this Friday’s February jobs report will be crucial in determining direction within the labor market and will either help alleviate economic concerns or heighten them further. In this environment, staffing companies especially need to be prepared. Which is why the ASA research department will debut a new member benefit on Monday, March 10 at 1 p.m. Eastern time—the monthly ASA Economic & Staffing Forecast. In this 30-minute, targeted report, ASA members will receive a staffing-specific outlook, including labor market and policy implications. Insights will be tailored to the needs of growth-minded staffing professionals. 

Please note: The ASA Economic & Staffing Forecast is for members only; you must be logged in to the ASA website to register. Logged in members can register here. Questions? Contact the ASA research department at r*******@americastaffing.net.

Employee Engagement Waned in 2024

Employee engagement in the U.S. has fallen to its lowest level in a decade, according to a Gallup survey, which found 31% of employees were engaged in 2024, a level not seen since 2014. This is down from 36% in 2020. Gallup estimates that about eight million fewer employees were engaged in 2024 than in 2020.

While Gallup bases its engagement metric on 12 separate aspects of the employee experience, three factors in particular may have driven this decline in engagement:

• Expectations: The share of employees who say they clearly know what is expected of them fell from 56% in 2020 to 46% in 2024.
• Feeling cared about: Fewer workers feel strongly that someone at work cares about them as a person in 2024 (39%) than in 2020 (47%).
• Development: Three in 10 U.S. workers strongly agreed that someone at work cares about their development in 2024, down from 35% in 2020.

Workers most at risk of declining engagement are those younger than 35, particularly Gen Z employees who were five points less engaged in 2024 than in 2023. In addition to the themes listed above, workers in this category reported declining sentiment in receiving recognition, having the appropriate materials and equipment for work, and having opportunities to do what they do best.

It is an odd time in the labor market, with quits and hires both depressed. In the current low-turnover environment, managers can ensure their employees are engaged by prioritizing clear communication and showing genuine care for employee wellbeing and their professional development.