Business Leaders Still Wary on Growth, More Uncertain on Hiring — Evening Brief – 02.25.26

Business leaders continue to face uncertainty about future sales, and questions about hiring are slowly building. While expectations for revenue growth have stabilized in recent months, executives remain more cautious than they were before the pandemic and are torn over how to respond if costs move sharply lower. 

According to the Atlanta Fed’s latest Survey of Business Uncertainty, smoothed uncertainty about revenue growth for the four quarters ahead held nearly steady at 3.72% in February, compared with 3.73% in January. While the month-over-month move was negligible, the level remains elevated relative to the pre-2020 period, underscoring lingering caution around forward sales expectations. 

Uncertainty around employment growth ticked higher. For the year ahead, smoothed employment growth uncertainty rose to 4.33% in February from a revised 4.27% in January (previously reported at 4.29%). The increase suggests firms remain less confident in their workforce planning outlook, even as labor markets have cooled from peak tightness. 

Notably, firms reported greater uncertainty around future sales growth than was typical before the pandemic — a dynamic that continues to influence pricing behavior. When faced with unexpectedly higher costs, most firms indicated they would raise prices to protect margins. However, responses were more mixed when asked how they would react to lower-than-expected costs, signaling asymmetry in pass-through behavior. 

Executives cited labor quality and availability, demand conditions, and monetary policy as their top concerns for the remainder of the year.