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Yahoo
2 days ago
- Business
- Yahoo
Forget tariffs, here's why CEOs worry about a looming recession
Forget tariffs, here's why CEOs worry about a looming recession originally appeared on TheStreet. Tariffs are on the tip of many Americans' tongues, thanks to the multifaceted trade war in which U.S. President Donald Trump has used foreign taxes as a key negotiating tactic against foreign economic rivals. While Trump says he loves everything about tariffs, including the word itself, the rest of the world's business leaders don't share his affinity. Global stock markets certainly hate the trade war. Every time a new tariff is announced, foreign and domestic markets fall. Every time Trump announces a deal has been reached, markets rise, even if no concrete deals are ever moreso than investors, Trump's tariffs place business leaders in a most awkward position. Businesses love predictability. Knowing what to expect and when to expect it allows them to plan for the future and forecast expectations. However, Trump's on-again, off-again tariffs have had the opposite effect, casting doubt on what businesses will have to pay their suppliers quarterly, monthly, or even weekly. This environment has, understandably, had an adverse effect on CEO confidence, as reflected in the latest survey data from The Conference Board. Every quarter, The Conference Board releases its Measure of CEO Confidence in collaboration wth The Business Council. Over 130 CEOs participated in the Q2 survey between May 5 and May 19, and the results are concerning. A reading below 50 indicates a negative outlook. The confidence index fell by 26 points to 34, the lowest level recorded since Q4 2022. 'All components of the Measure weakened into pessimism territory,' said Conference Board's Senior Economist of Global Indicators Stephanie Guichard.'Expectations for the future also plummeted, with more than half of CEOs now expecting conditions to worsen over the next six months, both for the economy overall and in their own industries.' The overwhelming majority of CEOs (83%) said they expect a recession in the next 12 to 18 months, nearly matching the rate reached in late 2022 and early 2023. While tariffs and trade issues were near the top of the list of concerns, geopolitical concerns were the number one concern. Geopolitical instability surpassed cybersecurity, 'which dominated CEOs' concerns over the past two years,' but dropped to fourth this year. However, the forecast from the top 1% isn't all doom and gloom. Most CEOs anticipate no change in the size of their workforce over the next 12 months. So while they expect hiring to be stagnant, they aren't anticipating any layoffs. The share of CEOs expecting to expand their workforce fell slightly to 28% from 32% in Q1. The share of CEOs planning to reduce their workforce rose 1% to 28%. 'Still, consistent with more pessimism about the outlook in their own industries, the share of CEOs expecting to revise down investment plans doubled in Q2 to 26%, while the share expecting to upgrade investment plans dropped 14 ppts to 19%,' said Business Council Vice Chairman Roger W. Ferguson. Part of the reason employers are confident in the labor market is that they currently aren't having trouble finding qualified candidates. Since there's less competition, the share of CEOs planning to raise wages by 3% or more over the next year dropped to 5% from 71% in Q1. While the future is murky for many CEOs, the present is almost equally disorienting. The percentage of CEOs who say that economic conditions are worse now than they were six months ago jumped 11% to 82% in Q2. Only 2% of respondents felt economic conditions were better. This change in sentiment is also reflected in the 69% of CEOs who said conditions in their own industries were worse than six months ago, a dramatic increase from 22% in Q1. Only 7% said conditions improved in their industries, and there was also a significant drop from 37% in tariffs, here's why CEOs worry about a looming recession first appeared on TheStreet on May 31, 2025 This story was originally reported by TheStreet on May 31, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
3 days ago
- Business
- Miami Herald
Forget tariffs, here's why CEOs worry about a looming recession
Tariffs are on the tip of many Americans' tongues, thanks to the multifaceted trade war in which U.S. President Donald Trump has used foreign taxes as a key negotiating tactic against foreign economic rivals. While Trump says he loves everything about tariffs, including the word itself, the rest of the world's business leaders don't share his affinity. Global stock markets certainly hate the trade war. Every time a new tariff is announced, foreign and domestic markets fall. Every time Trump announces a deal has been reached, markets rise, even if no concrete deals are ever made. Related: Tariff repeal couldn't come at a better time for US businesses Even moreso than investors, Trump's tariffs place business leaders in a most awkward position. Businesses love predictability. Knowing what to expect and when to expect it allows them to plan for the future and forecast expectations. However, Trump's on-again, off-again tariffs have had the opposite effect, casting doubt on what businesses will have to pay their suppliers quarterly, monthly, or even weekly. This environment has, understandably, had an adverse effect on CEO confidence, as reflected in the latest survey data from The Conference Board. Image source: Nikhinson - Pool/Getty Images Every quarter, The Conference Board releases its Measure of CEO Confidence in collaboration wth The Business Council. Over 130 CEOs participated in the Q2 survey between May 5 and May 19, and the results are concerning. A reading below 50 indicates a negative outlook. The confidence index fell by 26 points to 34, the lowest level recorded since Q4 2022. "All components of the Measure weakened into pessimism territory," said Conference Board's Senior Economist of Global Indicators Stephanie Guichard. Related: New car prices are rising; here's where to get the best deal "Expectations for the future also plummeted, with more than half of CEOs now expecting conditions to worsen over the next six months, both for the economy overall and in their own industries." The overwhelming majority of CEOs (83%) said they expect a recession in the next 12 to 18 months, nearly matching the rate reached in late 2022 and early 2023. While tariffs and trade issues were near the top of the list of concerns, geopolitical concerns were the number one concern. Geopolitical instability surpassed cybersecurity, "which dominated CEOs' concerns over the past two years," but dropped to fourth this year. However, the forecast from the top 1% isn't all doom and gloom. Most CEOs anticipate no change in the size of their workforce over the next 12 months. So while they expect hiring to be stagnant, they aren't anticipating any layoffs. The share of CEOs expecting to expand their workforce fell slightly to 28% from 32% in Q1. The share of CEOs planning to reduce their workforce rose 1% to 28%. "Still, consistent with more pessimism about the outlook in their own industries, the share of CEOs expecting to revise down investment plans doubled in Q2 to 26%, while the share expecting to upgrade investment plans dropped 14 ppts to 19%," said Business Council Vice Chairman Roger W. Ferguson. Part of the reason employers are confident in the labor market is that they currently aren't having trouble finding qualified candidates. Since there's less competition, the share of CEOs planning to raise wages by 3% or more over the next year dropped to 5% from 71% in Q1. While the future is murky for many CEOs, the present is almost equally disorienting. The percentage of CEOs who say that economic conditions are worse now than they were six months ago jumped 11% to 82% in Q2. Only 2% of respondents felt economic conditions were better. This change in sentiment is also reflected in the 69% of CEOs who said conditions in their own industries were worse than six months ago, a dramatic increase from 22% in Q1. Only 7% said conditions improved in their industries, and there was also a significant drop from 37% in Q1. Related: Wall Street's TACO trade gains momentum amid stock market rally The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Fibre2Fashion
4 days ago
- Business
- Fibre2Fashion
China's LEI & CEI slip again, raising economic concerns: TCB
China's economic outlook showed further signs of moderation as The Conference Board (TCB) Leading Economic Index (LEI) fell by 0.3 per cent in April 2025 to 149.2 (2016=100), following an identical decline in March. China's economic outlook softened as the LEI fell 0.3 per cent in April 2025, marking a 1.3 per cent drop over six months due to weak consumer sentiment, logistics, and export orders. The CEI also declined 0.7 per cent, signalling weaker current activity. However, easing US-China tariffs and new monetary measures may support growth, with 2025 GDP forecast at 4.5â€'5.0 per cent. Over the six months from October 2024 to April 2025, the LEI dropped by 1.3 per cent, easing from a steeper 1.7 per cent fall in the previous six-month period. 'For at least 6 months, the month-on-month declines in the LEI have primarily been driven by persistent weakness in three components: consumer expectations, logistics prosperity index and new export orders in manufacturing. The new export orders fell to a reading last seen in 2022, likely because of the steep US tariffs first imposed in early April,' Malala Lin, economic research associate, at The Conference Board said in a release. Meanwhile, the Coincident Economic Index (CEI), which reflects current economic conditions, declined by 0.7 per cent to 152.4 in April, partly reversing March's 1.7 per cent gain. CEI growth over the recent six-month period slowed markedly to 0.7 per cent, compared to 4.0 per cent in the preceding six months. 'However, not captured in this latest LEI reading, most recently, the US and China have reached an agreement to de-escalate tariff impositions, which could alleviate pressure on export driven sectors of China's economy. Additionally, 10 coordinated monetary policy measures were launched in early May to mitigate the impacts of trade tensions. While the negative LEI growth rates still signal headwinds ahead, these extensive monetary actions are expected to support growth going forward. Overall, The Conference Board currently forecasts annual real GDP growth at between 4.5 per cent to 5.0 per cent in 2025,' Lin added. Fibre2Fashion News Desk (HU)
Yahoo
5 days ago
- Business
- Yahoo
Consumer Confidence Surges in May: ETFs to Gain
Consumer sentiment got a strong boost in May, thanks to optimism over easing trade tensions between the United States and China. According to a survey released on May 27, 2025 by The Conference Board, the Consumer Confidence Index jumped to 98.0, marking a 12.3-point increase from April. This figure also far exceeded the Dow Jones consensus estimate of 86.0, as quoted on CNBC. The primary driver of the surge was the progress in U.S.-China trade negotiations. President Donald Trump's decision on May 12 to halt severe tariffs appears to have reassured consumers. The May uptick follows five consecutive months of declining consumer confidence, a trend fueled by the escalating trade war initiated by President Trump. China was a key focus of U.S. tariff actions until both sides reached a temporary truce in early May. Other components of the survey also showed improvement. The Present Situation Index climbed to 135.9, up 4.8 points. The Expectations Index surged to 72.8, an increase of 17.4 points. Investor sentiment improved as well, with 44% now expecting stock prices to rise over the next 12 months, compared to 37.6% in April. Perceptions of the labor market also improved: about 19.2% of respondents expect more job availability in the next six months (up from 13.9%). Those expecting fewer jobs fell to 26.6% (from 32.4%). A slightly increased 31.8% said jobs are 'plentiful.' Against this backdrop, both consumer discretionary and staples-based exchange-traded funds (ETFs) should benefit. These ETFs include Consumer Discretionary Select Sector SPDR Fund XLY, Vanguard Consumer Discretionary ETF VCR, Fidelity MSCI Consumer Discretionary Index ETF FDIS, SPDR S&P Retail ETF XRT, Consumer Staples Select Sector SPDR Fund XLP, iShares U.S. Consumer Discretionary ETF IYC and iShares U.S. Consumer Staples ETF IYK. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports SPDR S&P Retail ETF (XRT): ETF Research Reports Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports iShares U.S. Consumer Staples ETF (IYK): ETF Research Reports Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports iShares U.S. Consumer Discretionary ETF (IYC): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
UPI
6 days ago
- Business
- UPI
May American consumer confidence rebounds after five months of decline
Traders work on the floor of the New York Stock Exchange on Wall Street in February. File Photo by John Angelillo/UPI | License Photo May 27 (UPI) -- The nonprofit research organization The Conference Board announced Tuesday that the confidence of American consumers in regard to current business and labor market conditions is on the rise, but notes a recession could be on the horizon. According to a press release, the Board's Consumer Confidence Index increased in May by 12.3 points to 98, up from 85.7 in April. Its Present Situation Index, which is based on the assessment of American consumers on current business and labor market conditions, also went up 4.8 points to 135.9. The Board's Expectations Index, which measures the short-term outlook of American consumers in relation to business, income and labor market conditions also rose 17.4 points to 72.8. Global Indicators at The Conference Board Senior Economist Stephanie Guichard said that consumer confidence "improved in May after five consecutive months of decline." However, as per The Conference Board, when the Expectations Index stays below 80, it often signals an imminent recession. Even so, the data indicates that consumers were more confident about potential job availability and business conditions over the next six months and had increased optimism about future income prospects. Guichard also said that consumers' outlook on stock prices improved as the market showed a positive direction in May "with 44% expecting stock prices to increase over the next 12 months," an increase from 37.6% in April, "and 37.7% expecting stock prices to decline," which is down from 47.2% in April. "This was one of the survey questions with the strongest improvement after the May 12 trade deal," she added. The reported cutoff date for the data taken in for these scales was May 19, but around half were received after the May 12 announcement by the Trump administration that it had paused tariffs on Chinese imports. "The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards," Guichard also explained, but while Expectations Index had risen from April, "their appraisal of current job availability weakened for the fifth consecutive month."
