81% of CEOs are preparing for a recession—but most expect it to be ‘brief and shallow’

Roger Ferguson, former CEO of TIAA (pictured here in 2020) weighed in on new data about CEO confidence.
Melissa Lyttle—Bloomberg/Getty Images

Good morning.

CEO confidence continued to deteriorate in the third quarter, according to a metric compiled by the Conference Board, in collaboration with the Business Council. Fresh out this morning, the Measure of CEO Confidence fell deeper into negative territory than at any time since the beginning of the pandemic—registering 34 this quarter, down from 42 in the second quarter. Anything below 50 indicates more negative than positive responses from CEOs.

But if this is a recession, it’s still a weird one. While 81% of CEOs surveyed say they are preparing for recession over the next 12 to 18 months, the survey also shows that…

…Three-quarters of CEOs say demand for their own company’s products or services has risen or held steady over the past three months.

…50% still expect to expand their workforce over the next 12 months (down from 63% in Q2).

…82% still expect their capital spending to grow or hold steady over the next year (down from 93% in Q2).

…73% continue to report some difficulties in hiring qualified people (down from 80% in Q2).

Former TIAA CEO Roger Ferguson, who is on the boards of both organizations, said that while CEOs “are now prepared for the near inevitability of a U.S. recession…the vast majority expect the downturn to be brief and shallow.” Unclear is whether that “brief and shallow” recession will be sufficient to beat back inflation, which Ferguson says remains the “top challenge” of CEOs.  

You can find out what JPMorgan’s Jamie Dimon, Goldman Sachs’ David Solomon, BlackRock’s Larry Fink, and Deutsche Bank’s Christian Sewing think of recession prospects here.

Alan Murray



Climate bill boosters

Billionaire philanthropist Bill Gates was among the influencers who saved U.S. President Joe Biden’s climate bill from extinction. In a new interview, Gates recounts his personal efforts to keep the legislation alive while waiting for Sen. Joe Manchin to come around, including the pep talk Gates gave Senate Majority Leader Chuck Schumer, who told Gates he had exhibited “infinite patience.” “You’re right,” Gates says he told Schumer. “And all you need to do is show infinite plus one patience.” Bloomberg

American Airlines’ Overture 

American Airlines is betting on a supersonic jet whose launch may still be years away. The carrier on Tuesday announced a deal with Boom Supersonic to purchase 20 ultrafast Overture jets, with the option to buy 40 more. (The terms weren’t disclosed.) Boom, a Colorado-based startup, is developing planes that will cut flight time on routine routes like Miami to London in half by flying faster than the speed of sound. Airlines like American and United are betting on the revival of supersonic travel, but some industry observers are skeptical of such a resurgence and of Boom itself. The startup’s Overture aircraft, for instance, still doesn’t have an engine maker. Wall Street Journal 

HBS for free

Prestigious Harvard Business School says it will waive its $76,000 annual tuition for lower-income MBA students as it seeks to diversify its student body and respond to criticism that higher education costs are limiting social mobility. The school will take into account applicants’ gross income over the past three years, socioeconomic background, and how much undergraduate debt they’ve accumulated. HBS expects 10% of students in its flagship MBA program—roughly 200 students—to attend for free. Financial Times 


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This edition of CEO Daily was edited by Claire Zillman.

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