CEOs are scaling back hiring plans and anticipating slower sales as the US economy shows signs of cooling.
America’s corporate leaders plan to pull back on hiring over the next six months and expect a slowdown in sales, according to a survey of CEOs, which comes as cooling in the jobs market has prompted the Federal Reserve to deliver a significant 50 basis-point rate cut.
The Business Roundtable’s CEO Economic Outlook Survey, released on Sept. 18, paints a picture of a softening labor market and expectations for a decline in consumer spending.
The survey’s composite index, which measures CEO expectations for capital spending, hiring, and sales over the next six months, fell five points, to 79, in the latest survey. This marks the first time that the index has dipped below its historical average of 83 this year.
The drop in the index is largely driven by reduced hiring expectations and a sharp decrease in anticipated sales, despite a slight uptick in capital investment plans.
“This is the second consecutive quarter in which CEOs have reported they are moderating their hiring plans,” Business Roundtable CEO Joshua Bolten said in a statement.
Capital-investment plans showed a slight improvement, with the subindex tracking capital expenditures rising