CEO confidence in the economy at a 4-year high

CEO economic confidence is the highest since 2022, with that optimism now spilling over into plans to hire more workers.

Why it matters: The chief executives of America's largest companies are signaling confidence in the economy that could support job growth and investment, a stark contrast with the gloom among consumers.

Driving the news: The Business Roundtable's CEO Economic Outlook Index climbed 3 points in the third quarter, to 94 — the fifth consecutive increase and well above the historical average of 83.

• The index has climbed steadily from a five-year low after President Trump's "liberation day" tariffs early last year.
• The survey was conducted from Aug. 31 through Sept. 11, a period that coincided with new U.S.-Canada tariffs taking effect, tensions in the Iran war intensifying and a renewed surge in global energy prices.
• Yet CEOs still grew more upbeat. Sales and investment plans remained well above historical norms, while the hiring index jumped 7 points, to 58, just shy of its long-run average of 61.

What they're saying: "The increase in hiring plans is encouraging, even as the broader economic picture remains mixed," Business Roundtable CEO Joshua Bolten said in a statement.

• "But further deterioration of the vital U.S.-Canada economic relationship and broader North American trading framework could deliver a major blow to that progress," Bolten added, urging both sides to resume trade talks and roll back tariffs.

The intrigue: For much of the past year, the survey captured a striking feature of the AI economy — strong investment plans alongside unusually weak hiring projections. It reflected a bet that AI and other new technology could fuel growth without requiring companies to add many workers.

• The latest survey's pickup in hiring plans suggests a growing appetite for workers, with a larger share of CEOs planning to add workers and a smaller group expecting cuts.
• About 36% expect employment to rise over the next six months, 37% expect no change, and 28% expect employment to shrink.
• The shift is consistent with a recent firming in labor market data, with job growth picking up sharply in August.

The big picture: The brighter mood in the C-suites stands in sharp contrast with the gloom among consumers, underscoring a widening divide in how businesses and households are experiencing the economy.

• The University of Michigan's consumer sentiment index fell to 47.8 in early September, the second-lowest reading on record (and about 3 points above the all-time low hit in May).
• Consumers are feeling the latest price pressures more acutely, with year-ahead inflation expectations jumping to 4.6% from 4% as energy prices surged.
• "This quarter's survey results are welcome news and reflect the resilience of the U.S. economy, but affordability pressures remain a challenge for businesses and families," Cisco Systems CEO Chuck Robbins, who chairs the Business Roundtable, said in a release.

The bottom line: Corporate America is looking through an economy that has left consumers rattled — and now CEOs appear more willing to put that confidence behind more hiring.

Situational awareness: Bolten is stepping down as head of the BRT on Jan. 31, our colleague Mike Allen reports. His successor will be Kristen Silverberg, a former U.S. ambassador to the European Union and current No. 2 at the group.