A recession has been perpetually months away over the last year, but company leaders are increasingly optimistic that the Fed’s soft landing may be possible.
Key Details
- A survey of CEOs in Business Roundtable’s CEO economic outlook survey found that while hiring may slow in the coming months, the overall economy will remain solid.
- Many of the surveyed CEOs feel that the economy can transition from high rates of inflation to a more stable economy without plunging into a recession, Axios reports.
- CEO expectations for the economy are lower than historical averages, they remain fairly optimistic.
why it’s news
Worries about a recession have been at the forefront of business leaders’ minds for over a year, but the survey indicates that CEOs are hopeful for the coming year. Expectations for company sales remain the same as last quarter, but capital spending is up—something not typically seen before a recession.
While hiring is down, only 27% of CEOs expect employment to decrease in the next six months. Fewer company leaders anticipate increasing their headcount in the coming months. Only 33% anticipate growth compared to 41% last quarter, Axios reports.
Job seekers have enjoyed a booming labor market in the last year, but companies are not likely to continue hiring as rapidly as before. However, executives are predicting a period of slow growth rather than contraction. Some companies will continue hiring, but their decisions will be based on hiring highly-skilled workers who are competitive in the field.
The surveyed CEOs anticipate a 1.5% GDP growth this year—an increase from their expectations last quarter.
Now that the debt ceiling debate has been resolved in a manner acceptable to many CEOs, executives are looking to policies that will affect their business, such as infrastructure and energy projects, Axios reports.
“Action by Congress and the Administration to raise the debt ceiling was a welcome signal from Washington that bipartisan agreement at a consequential moment is achievable,” General Motors CEO Mary Barra says. “Business leaders stand ready to work with lawmakers to advance policies that strengthen the economy and American competitiveness.”
Signs are starting to indicate that the Federal Reserve’s long-promised soft landing may be possible after all.
