Economists less bullish as early 2012 gains wither

As the second half of 2012 gets under way, economists say they’re increasingly pessimistic about short-term growth, as sales and profit gains of earlier this year are disappearing. Their forecasts are gloomy also because of the potential impact in the United States from Europe’s financial crisis, the possible expiration of the Bush tax cuts in December, and the prospect of major cuts in federal spending. A survey by the National Association for Business Economics released this morning also found less evidence of hiring, confirming the trend in recent monthly jobs reports from the government. In the quarterly survey of 67 economists who work for companies or industry trade groups, 22% reported rising employment in July, down from about 30% in the last three surveys and 42% a year ago. On the positive side, only 9% reported falling employment. The rest said it was unchanged. Just 39% of the economists surveyed reported rising sales at their companies in July, down from 60% in April. There was a similar trend on corporate profit margins, with 29% reporting rising margins in July, compared with 40% in April. “The survey results suggest worsening economic conditions,” says Nayantara Hensel, a business professor at National Defense University, who analyzed the results for NABE. “The rising sales and profit margins experienced earlier in the year may have been short-lived.” See a summary of the survey results from the NABE here.