Big companies are signaling that workers are losing control of the job market.

• A rise in the number of top corporate executives is stating that it is now simpler to locate and recruit skilled employees.
• The fourth quarter CNBC CFO Council Survey indicates that the peak inflation period has ended, and the economy is slowing down. However, more CFOs believe in a "soft landing" rather than a recession for 2024.
• The Federal Reserve monitors the hot job market and wage growth to determine when to halt raising interest rates.

The labor movement has regained strength through union strikes in Detroit and Hollywood, but indications suggest that the post-pandemic job market may weaken worker control over wage growth and job opportunities.

The challenge of finding qualified workers for open positions has been among the biggest for companies, and wage growth among the most-watched inflationary forces at the Fed and within C-suites. Now, 60% of chief financial officers surveyed by CNBC say that it has become easier to find and hire qualified workers for open positions compared to a year ago. This marks a 25-percentage point increase from a quarter ago, when 35% of CFOs held that view, a magnitude of change quarter over quarter that is rare in this quarterly survey series.

In the Q3 CNBC CFO Council survey, there was a sign that a shift was occurring in the balance of power between workers and employers from within the C-suite, with 50% of CFOs stating that conditions in the labor market were "about the same" - meaning it was no longer getting harder to find and hire skilled labor. However, this trend has now shifted, and last quarter, only 15% of CFOs believed it was harder than a year ago to find workers, a view that is almost completely gone from the survey group.

The CNBC CFO Council survey is a quarterly survey of views from top financial officers at major corporations, with 30 CFOs responding between Nov. 14-Nov. 24.

The U.S. population demographics and the lack of progress on immigration policy suggest that a tight labor market will be the norm for hiring firms in the future. However, recent CFO data aligns with the mounting headlines that the Great Resignation has ended, and the hard data and sentiment indicators from the labor market show that the Federal Reserve's interest rate hikes are cooling things down, from job growth to wage growth. The latest nonfarm payroll report showed a resilient economy still adding jobs, but at a pace that was below expectations. Unemployment has ticked up, though it remains low by historical standards, wage growth continues to decline, and the "quits rate" has leveled off from its pandemic surge. The Glassdoor Employee Confidence Index fell to its lowest level since 2016 this fall.

The CFO's perspective on the labor market influences their broader view of the economy and markets, which has undergone significant changes over the past year. Initially, CFOs were pessimistic at the beginning of 2023 due to factors such as inflation, the Fed's aggressive interest rate hikes, and the stock market's decline in the final quarter of 2022.

Over a year has passed, and the market has recovered on the belief that inflation has been defeated and the increases have ended. The optimism among CFOs is also increasing, although it may not be as high as the stock investors' enthusiasm, which caused the Nasdaq to rise more than 10% this month. According to the Q4 CFO Council survey, there is a more positive outlook on the market and the likelihood of a soft landing.

Here are some additional survey highlights:

Fear of inflation is at a low.

According to the Q4 survey, CFOs reported a quarterly low of 7% citing inflation as the greatest threat to their business.

Inflation wins come at a cost.

Despite continued spending, consumer giants such as Walmart, Best Buy, and Home Depot have issued warnings about the consumer due to recent earnings reports and commentary. While the Fed may have control over inflation and wage growth may be slowing, this is also causing concerns about consumer demand, with 33% of CFOs citing it as their biggest external risk, the highest it has been among risk factors in the four quarterly surveys this year.

Stocks can continue to move higher.

Historically, CFOs have disregarded market noise in their forecasts. However, the Q4 survey reveals that bullishness among CFOs is at its highest for the year, with over 40% believing it's more likely that the Dow will reach 40,000 than fall below 30,000. In contrast, only about one in four (27%) think the bearish outcome for the Dow is the more likely one. In comparison to the Q1 survey, where only 13% of CFOs saw the 40,000 milestone as likely, and just a quarter ago, only 25% of CFOs believed it was possible, the Dow has significant potential for growth. It has only increased by 6% this year, compared to 19% for the S&P 500 and 37% for the Nasdaq Composite.

This doesn't mean 'soft landing' is now the majority view.

The number of CFOs anticipating a soft landing for the economy has increased to 37% in Q4, which is more than double the number in Q1. This trend continues from Q3, where it was 30%. However, a recession is still the more prevalent view, with half of CFOs expecting one next year, specifically 20% in the first half and 30% in the second half.

Inflation won't be back to normal any time soon.

Throughout 2023, CFOs have consistently predicted that the Fed's 2% inflation target will not be achieved anytime soon.

The percentage of CFOs who rate the Fed's inflation battle as "good" has increased to 53% from 40% in Q1, while the percentage of those who rate it as "poor" has decreased from 17% to 7%. However, the CFOs' view of when inflation will return to 2% keeps getting pushed back in time.

In Q4, 83% of CFOs believe that it won't happen until 2025 or later, an increase from 75% in the previous quarter. Despite the fact that inflation has reached multi-year lows in both consumer and wholesale indexes, consumer expectations for higher inflation have been rising for the past two months, which is a cause for concern for the Fed. It is evident from CFOs that, even if the Fed is winning the battle, it is a long way to total surrender.

Most CFOs don't expect rate cuts to start until Sept. 2024

Despite inflation being under control and Fed presidents stating it's too early to declare victory, CFOs anticipate a slow return to the 2% target rate. Only one-third of CFOs expect rate cuts to begin before September of next year, with 27% believing it will be in June or July. However, 30% of CFOs predict it will be 2025 before the Fed cuts, while 14% expect it to happen in November or December of next year. This is more hawkish than the market, which currently predicts the Fed may start cutting by May.