Key Takeaways

  • Confidence among CEOs of the largest U.S. companies rebounded this month, but they plan to cut jobs for a third consecutive quarter in response to a murky economic outlook, a Business Roundtable survey showed.
  • CEOs' expectations for sales and capital spending ticked up slightly, the Business Roundtable said Thursday. However, the share of CEOs planning to reduce headcount rather than increase it has risen to its highest level since the Great Recession this year, according to Joshua Bolton, CEO of the Business Roundtable, in a statement.
  • "CEOs' softened hiring plans reflect an uncertain economic environment, where artificial intelligence is driving massive capital expenditure growth and productivity gains, while tariff volatility is increasing costs, especially for tariff-affected businesses, including small businesses. We continue to urge our trading partners and the (Trump) administration to stabilize the system and lower tariffs," Bolton said.

Deeper Dive

Citing concerns about a softening labor market, the Federal Reserve on Wednesday cut its key interest rate by 25 basis points to a range of 3.5% to 3.75%.

Fed Governor Stephen Milan dissented, favoring a 50-basis-point cut, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid voted against the central bank's decision due to concerns that inflation would remain persistently above the Fed's 2% target.

"I've always been uncomfortable cutting rates too aggressively and too early, assuming the inflation we're seeing will be temporary," Goolsbee said Friday. "In my view, waiting until the first quarter of 2026 to confirm we're on track back to 2% inflation wouldn't cost much—nor would it take on much additional risk," he said in a CNBC interview.

Meanwhile, he said, falling inflation could allow the Fed to lower borrowing costs next year.

"I'm fairly optimistic that rates will be able to be quite a bit lower in 2026 than they are now," Goolsbee said. Compared with other Fed officials, he added, "I'm one of the most optimistic about how much rates will decline over the next year."

Schmid, another dissenter against holding the federal funds rate steady, expressed concerns about inflation and made clear his reluctance to support monetary easing.

"Inflation is still too high, the economy shows sustained momentum, and the labor market, while cooling, remains broadly balanced," he said Friday.

"I believe the current monetary policy stance is only modestly restrictive, or possibly not restrictive at all," Schmid said in a statement. "I continue to hear concerns about inflation," he added.

Both Schmid and Goolsbee will rotate out of the policy-setting Federal Open Market Committee next year.

Philadelphia Fed President Anna Paulson—who will rotate into the FOMC in 2026—expressed concerns about weakness in the job market on Friday.

In a speech, she said current data point to "a labor market with less dynamism" compared with December 2024.

"Hiring has been concentrated in healthcare and social services, turnover is low, and the rate of successful job searches is slowing," she said.

"Additionally, people report being more worried about losing their jobs, but actual layoffs seem low. The labor market is okay, but downside risks are elevated," Paulson said.

"Overall, I remain slightly more concerned about labor market weakness than about upside risks to inflation," she said.

The Business Roundtable said that among CEOs surveyed, 31% believe labor costs are the biggest driver of inflation. 15% see materials costs as the largest contributor to price pressures, and another 15% view healthcare costs as the main cause of inflation.

The Business Roundtable conducted the survey from November 21 to December 5, 2025. A total of 164 CEOs completed the survey.