Dec 11, 2019

CEO optimism drops for 7th straight quarter

JPMorgan CEO Jamie Dimon. Photo: Mark Wilson/Getty Images

A closely-watched index of CEO hiring, sales and spending plans declined again, according to a survey of some of the biggest corporations in the U.S. by Business Roundtable, their trade group.

Why it matters: The survey has shown declining optimism for almost two years. As we get closer to the 2020 election, the record-high CEO optimism levels that peaked during Trump’s presidency have now vanished — largely thanks to trade war uncertainty.

Details: CEOs are “cautious in the face of uncertainty over trade policy and an associated slowdown in global growth and the U.S. manufacturing sector,“ Business Roundtable points out. The survey was conducted prior to reports of progress with USMCA and a potential delay in another round of tariffs on Chinese imports.

  • CEO plans for hiring and capital appending — two key drivers of economic growth — fell quarter over quarter.
  • Expectations for sales growth, though, increased.

What they’re saying: “There has been progress in several policy areas that has strengthened the U.S. economy from top to bottom—but more progress needs to be made on free and fair trade agreements,” Jamie Dimon, JPMorgan CEO and chairman of Business Roundtable said in a press release.

  • “CEOs are justified in their caution about the state of the U.S. economy. While we have achieved a competitive tax environment, uncertainty surrounding trade policy and slowing global growth are creating headwinds for business,” said Joshua Bolten, Business Roundtable’s CEO.

The bottom line: While recession fears have abated for now, the results reflect the corporate America’s pessimism about the future of the economy — which could impact hiring and spending decisions.

Go deeper: U.S. economy surprises with 266,000 new jobs in November

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Survey: Top executives are pessimistic about the 2020 economy

Source: Deloitte; Note: Survey reflects CFO expectations for year-over-year increases in business spending and hiring; Chart: Axios Visuals

Chief financial officers are bracing for an economic slowdown this year, according to Deloitte's quarterly survey of nearly 150 executives at top North American companies.

Why it matters: Multiple surveys showed plunging optimism among top executives last year, thanks largely to trade war uncertainty. Deloitte's survey is a signal that skittishness continues to curb companies' hiring and spending plans this year, which could further hurt economic growth.

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Business-backed trade groups lead USMCA ad spending

Data: Advertising Analytics; Chart: Axios Visuals

The top groups that ran ads for the U.S.-Mexico-Canada Agreement (USMCA) cumulatively spent over $4 million pushing the passage of the trade pact, data from advertising research firm Advertising Analytics shows.

Why it matters: The majority of advertisers for USMCA-specific ads were business-backed trade groups — a nod to big corporations' anxiety to draw attention to the issue.

Go deeperArrowDec 17, 2019

Global economic uncertainty eased by U.K. elections, China trade deal

U.K. Prime Minister Boris Johnson. Photo: Lindsey Parnaby WPA Pool/Getty Images

Two of the biggest constraints to the world economy — uncertainty about Brexit and the China trade war — were alleviated last week, Bloomberg reports.

Why it matters: With a "phase one" deal between U.S. and China staving off more tariffs and the United Kingdom now on pace to leave the European Union on Jan. 31, the outlook for global growth should be more positive in 2020 after being hampered by widespread uncertainty in 2019.

Go deeperArrowDec 15, 2019