US Companies Face More Pain as Expected ‘Earnings Recession’ Looms

A street sign for Wall Street outside the New York Stock Exchange (NYSE) in New York on July 19, 2021. Andrew Kelly/Reuters

NEW YORK—U.S. companies’ earnings woes are likely to extend beyond the weak fourth quarter, as a booming labor market weighing on margins looks set to hurt results in the first half of this year.

Expectations for U.S. earnings to decline in the first and second quarter come amid weaker-than-expected fourth-quarter results for 2022, which Credit Suisse estimates will be the worst earnings season outside of a recession in 24 years.