CEO confidence plunges at fastest rate in nearly 50 years
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U.S. CEO confidence recorded the largest quarterly decline in nearly 50 years of data, per a Conference Board report out Thursday.
Why it matters: CEOs seem to be losing their nerve just as consumers are starting to get more optimistic, amid the constant uncertainty of President Trump's trade war.
By the numbers: The Conference Board's Measure of CEO Confidence, compiled with membership group the Business Council, fell to 34 in the second quarter, versus 60 in the first quarter.
- The Conference Board said it was the largest quarter-over-quarter decline ever recorded, in a series that goes back to 1976.
- The same indicator hit a three-year high in the first quarter, while the trade war was in its early stages but before the "Liberation Day" tariffs.
- The group surveyed 133 CEOs from May 5 to May 19 — just before and just after the pause on the largest China tariffs.
What they're saying: "All components of the Measure weakened into pessimism territory," Conference Board senior economist Stephanie Guichard said in a statement.
- Guichard also acknowledged the impact of the China deal — which softened, but did not remove, CEOs' concerns.
- "CEOs responding before and after May 12 reported similar very negative views about the current state of the economy and their own industries. However, the CEOs who responded after May 12 tended to be somewhat less pessimistic about the future and fewer expected a deep recession."
Between the lines: The Conference Board used the word "collapsed" multiple times to describe the dramatic fall in sentiment.
- 82% of CEOs said economic conditions were worse than six months ago, versus just 11% who felt that way in the first quarter.
- 64% expect things to worsen further in the next six months, against 15% who felt that way previously.
The bottom line: The China deal, and a court blocking most tariffs, may be enough to make executives less gloomy.
- But there's a deep hole to climb out of now to get back to optimism.
