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Business leaders are walking back recessionary expectations for the U.S. that initially spiked in the aftermath of President Donald Trump’s tariff announcement, according to data released Monday.
Less than 30% of CEOs forecast either a mild or severe recession over the next six months, per Chief Executive Group’s survey of more than 270 taken last week. That’s down from 46% who said the same in May and 62% in April.
The share of CEOs polled this month who said they expect some level of growth in the U.S. economy also shot up above 40%. That’s nearly double from the 23% who gave the same prediction in April.
Expectations for flat economic growth have surged in recent months, rising above 30% from 15% in April. That comes as some market participants question if “stagflation” — a term used to described an environment with stagnating economic growth and sticky inflation — could be on the horizon.
Chief Executive’s latest data reflects a shifting outlook among corporate America’s leaders as they follow the evolving policy around Trump’s tariffs. Many large companies have left their earnings outlooks unchanged, citing the uncertainty around what the president’s final trade policy will and will not include.
Trump sent U.S. financial markets spiraling in April after first unveiling his plan for broad and steep levies on many countries and territories, which market participants worried would hamper consumer spending. He placed many of those duties on pause shortly after, which helped the market recoup much of its losses.
The White House has been negotiating deals with countries during this reprieve, which is set to expire early next month. The Trump administration announced an agreement with the United Kingdom and is holding talks with China in London on Monday.
Recession talk
Talk of an economic slowdown has once again become a hot topic in corporate America. “Recession” and similar iterations of the word have come up on 150 S&P 500-listed earnings calls so far this year, about double the amount seen in the same period of 2024, according to a CNBC analysis of FactSet data.
“We do recognize that sweeping changes in global trade policy could contribute to broader macroeconomic volatility, including the potential to tip certain regions into a recession,” said Michael DeVeau, finance chief at International Flavors & Fragrances, on the company’s earnings call last month.
Firms have raised alarm that tariffs could hit their bottom lines and that they will need to pass down higher costs by raising prices. Some also said rising fears of a recession because of the levies have pushed consumers to tighten their belts financially.
The University of Michigan’s closely followed consumer sentiment index has plunged near its lowest levels on record as the tariff announcements rattled everyday Americans.
However, a New York Federal Reserve survey released Monday paints a brighter picture. The data showed that the average consumer is growing less concerned about inflation after Trump walked back some of his most severe trade plans.
“From the macro, the worst concerns, I think, have passed,” Home Depot CEO Edward Decker said last month. “We’ve gone from a dynamic of where we were going to have a near certain recession and stock market correction in early April, to where today stock markets fully recovered (and) recession expectations are way down in the past month.”
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