Why Top CEOs Are Optimistic About the US Economy
At our recent gathering, we surveyed approximately 60 top CEOs on a wide range of economic matters. While our anonymous poll was informal and not scientifically rigorous, the results indicate that CEOs are increasingly and generally optimistic about the U.S. economy – in fact, much more bullish than just about any other group in the country.
The CEOs we surveyed are surprised by the strength of their own views, as 81% of respondents say they have been taken aback by how well the economy has performed so far. Now, a full 84% of respondents believe the economy is headed for a soft landing, while only 10% expect a significant recession, and only 6% expect a hard landing.
The optimism we heard from these CEOs contrasts with the negative predictions of certain leading business voices, such as one prominent banker’s prediction two years ago of a Category 4 “economic hurricane,” which
Similarly, negative nationwide polling results from respected organizations such as Mark Penn’s about the economy; 74% of CEO respondents believe the economy is performing far better than these polling results suggest.
This optimism is backed up by headline economic statistics that remain strong, across economic growth, falling inflation, and low unemployment, with several CEOs pointing out how economic data suggests a soft landing is already unfolding in real time. Real U.S. GDP growth rebounded to a robust 3.0% in the second quarter, surpassing consensus estimates, with economists expecting the U.S. economy to grow by ~2.7% across the entire year. The World Bank says the “” strength of the U.S. of its improved global growth outlook this year, declaring that “the U.S. economy has shown particularly impressive resilience….growth has remained buoyant in the teeth of the fiercest monetary policy tightening in four decades.”
As several CEOs noted, those growth estimates have risen alongside falling inflation, with the most recent August CPI inflation report coming in , well below consensus estimates and CPI readings. Prices have come down without driving up unemployment, which last seen in the 1960s, while wage growth now outpaces inflation, with real incomes growing at a steady rate . In dollar terms, income growth has price growth by $3,776 since 2021. Once again, this stands in contrast to the prognostications of some cynics. that we needed punishingly high interest rates to cause ten percent unemployment in one year, or six percent unemployment for three years to bring down inflation. It turns out, that was quite wrong.
Financial markets similarly back up the optimism shown by CEOs, with all major U.S. stock market indices — having already established well this year alone — driven by Similarly, consumer spending than expected and is forecasted to rise 2.4% in 2024, more than last year.
While the Fed did cut rates this last week, the CEOs were unanimous in their view that interest rates are too high. The Fed’s decision to lower rates was not a triumph of leadership, as inflation fell regardless of the interest rates not triggering the desired rise in unemployment Fed Chair Jay Powell . Not a single respondent thought that the Fed should hold rates where they are or hike rates. (While CEOs clearly appreciate the importance of rates and the Fed, 84% believe the business media is too focused on Fed rate speculation each day, week after week to the exclusion of other substantive genuine business issues.)
At a time when how the economy is doing has a central debate of the 2024 election, it is clear that our nation’s top CEOs remain broadly confident in America’s dynamism and resilience. In short, the CEOs are channeling the wisdom of baseball philosopher Yogi Berra: “The future ain’t what it used to be!”