America’s top CEOs bullish on economy, but nagged by doubts over Trump trade fights


Bloomberg News/Landov

PMorgan Chase CEO Jamie Dimon said businesses are bullish on the economy, but they worry about ongoing trade fights. Dimon is also chairman of the Business Roundtable.

The numbers: CEOs at America’s largest companies are still bullish on the economy, but they are more hesitant to commit to large investments until they see how the Trump White House’s trade fights turn out.

That’s according to the Business Roundtable. The lobbying group said its CEO Economic Outlook index slipped to 109.3 in the third quarter from 111.1 in the spring.

It’s still the fifth highest reading in the 16-year-history of the survey, however, and well above the historic average of 81.6.

What happened: Corporate chieftains expect sales will continue to increase in the fall: A measure of futures sales touched the second highest level ever.

Plans to hire and investment, however, were not quite as strong as they were in the prior quarter. Nearly two-thirds of CEOs, for example, said recently imposed tariffs would have a “moderate or significant negative effect” on their investment plans.

The Roundtable predicts the U.S. economy will expand at a 2.8% pace for the full year, a notch above is prior forecast. The group represents the largest companies in the U.S. that collectively employ 15 million people and generate $7.5 trillion in annual sales.

Also Read: Economy keeps pumping, but now the Fed wants to let out some air

Big picture: The economy accelerated in the spring, grew strongly through the summer and entered the fall on a roll. Surveys by groups such as the Roundtable or the chief lobbying group for the small companies, the National Federation of Independent Business, show that business people are very optimistic.

Read: Repatriated profits total $465 billion after Trump tax cuts

What are they saying?: “This survey shows how tax reform and regulatory relief continue to bring strength to the economy,” said Joshua Bolten, the roundtable’s president. “Yet current trade policies and uncertainty about future trade policies are having negative effects, especially on capital investment.”

Market reaction: The Dow Jones Industrial Average

DJIA, -0.67%

and the S&P 500

SPX, -0.46%

fell in Monday trades, but both indexes had hit all-time highs last week.

The 10-year Treasury yield

TMUBMUSD10Y, +0.40%

was unchanged at 3.01%. Rates have risen in the past few weeks ahead of expectations that the Federal Reserve will raise interest rates this week.

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