For a market that has typically been seen as concentrating on the future, investors can sometimes take a surprisingly backward view. Consider their upbeat reaction to Alphabet Inc.’s earnings, reflected in the stock’s 5 per cent jump in early trading Wednesday.

As encouraging as it might be that second-quarter revenue came close to what analysts expected — although the 13 per cent growth rate was still the slowest since the pandemic-crushed year of 2020 — investors ought to be focusing on the next few quarters. And on that subject, nothing that Alphabet executives said late Tuesday after the Google parent issued its results could be interpreted as upbeat.

It’s not just that Chief Financial Officer Ruth Porat emphasized that “tough” comparisons with last year’s bountiful earnings results would continue to “weigh on year-on-year growth rates” for the second half. Or that she and other Alphabet executives repeatedly batted away questions about the near future by referring to “uncertainty” about business conditions.

More notable was that Porat indicated that the impact of a hiring slowdown would “become more apparent in 2023.” That implies Alphabet didn’t slow hiring as a short-term response to current economic circumstances but with an eye to what conditions will be like next year, which shouldn’t thrill anyone.

It was notable that Alphabet added 10,108 people in the second quarter, which was a greater rate of hiring than either the first quarter (7,406) or the fourth quarter of last year (6,472). Clearly, Alphabet didn’t feel any immediate pressure to slow hiring. Porat also said that employee additions in the third quarter would reflect that “we already have a strong number of commitments, including new graduate hires,” which implies there won’t be much of a slowdown in the third quarter, either.

The strong hiring growth had an impact on the second-quarter numbers. While revenue grew 13 per cent, operating expenses grew 24 per cent. That was largely due to a 28 per cent increase in research and development costs, a result of headcount growth. The end result was that Alphabet’s operating profits were roughly flat: You can imagine what happens in the next few quarters if revenue growth slows even further but expenses aren’t restrained.

The uncertainty about the third quarter was also evident when Snap reported last week and declined to give any financial guidance for the third quarter for the first time since 2020. “Thus far in Q3, revenue is approximately flat on a year over year basis,” the company said, noting that “forward-looking visibility remains incredibly challenging, and it is unclear how the headwinds we observed in Q2 will evolve as we move through Q3.”

The bottom line is that an economic slowdown will depress spending on advertising. Alphabet may not be as badly affected as other digital ad firms, thanks to the value of search advertising to marketers, but it can’t escape the impact. Uncertainty about the near future is clearly top of mind for Alphabet executives. Investors need to keep that in mind.