CEO Confidence: America’s CEOs Just Lost Their Confidence

There is a gap opening up between the economy as economists measure it and the economy as the people running companies experience it. The official numbers say GDP is growing. The CEOs say things are getting worse. And when the people making hiring and firing decisions stop feeling confident, the official numbers eventually catch up.

This week brought a stack of data points that tell the same story from different angles. Let me walk through them, because together they paint a picture that the headline GDP number misses.

CEO confidence at 47

The Conference Board’s measure of CEO confidence fell to 47 in the second quarter of 2026. Anything below 50 means more executives see conditions worsening than improving. At 47, the reading is squarely in pessimistic territory, and the details underneath it are worse than the headline. Forty-seven percent of respondents said the economy is worse than six months ago, Fox Business reported.

That is a majority of the people running America’s largest companies saying conditions have deteriorated over the past six months. Not that growth is slower. That things are actively worse. The language matters.

The layoff signal

The number that should get the most attention is the hiring and firing split. Thirty-one percent of CEOs said they expect to reduce their workforce over the next six months. Twenty-eight percent plan to expand hiring. That is the first time in this cycle that planned cuts have outpaced planned additions in this survey.

Layoffs do not happen overnight. The decision to cut headcount is made weeks or months before the first pink slips go out. When a third of major company CEOs tell a survey they plan to reduce workforce, you are seeing the early edge of a jobs market shift, not its arrival. The unemployment numbers that show up in future reports will reflect decisions being made in boardrooms right now.

GDP at 1.6 percent

The macroeconomic backdrop matches the mood. Real GDP grew at an annual rate of 1.6 percent in the first quarter of 2026, and the Conference Board projects 1.8 percent growth for the full year, down from 2.1 percent in 2025, Deloitte reported. That is not recession territory by the textbook definition, but it is below the kind of growth that keeps labor markets tight and wage gains healthy.

The specific drag is familiar: tariff uncertainty, higher input costs, and a consumer whose spending is being squeezed by elevated prices that have not fully come down despite months of headline inflation improvement. Core PCE, the Fed’s preferred inflation gauge, is still elevated enough that rate cuts remain off the table.

The Fed stays put

Fed Chair Kevin Warsh and the rest of the Federal Open Market Committee voted to hold interest rates unchanged at their most recent meeting. The rationale is straightforward: higher energy prices are still creating upward pressure on inflation, and cutting rates into that environment risks re-igniting the price spiral the Fed spent two years trying to contain, Kiplinger reported.

For anyone holding a mortgage, a car loan, or carrying credit card debt, rates-on-hold means cost-on-hold. The households most stressed by the current rate environment are not getting relief, which flows directly into consumer confidence and, eventually, spending decisions.

Why CEOs and Main Street are both right

Here is the thing about the gap between official GDP and CEO sentiment. Both can be accurate simultaneously. An economy can be growing at 1.6 percent in aggregate while a significant portion of businesses experience it as contraction. Aggregate growth includes sectors that are booming, like AI infrastructure and defense, alongside sectors that are genuinely struggling, like consumer discretionary and commercial real estate.

The CEOs in the Conference Board survey are not being irrational. They are telling you what they see in their order books, their margins and their capital plans. When those indicators flash caution, they respond the way any business does: they slow hiring and start planning for reductions. That is not pessimism, it is prudence, and it has real consequences for workers.

Why This Matters

CEO confidence is a leading indicator. It shifts before the jobs numbers, before the GDP revisions, before the recession that economists argue about only after the fact. When confidence at this level correlates with planned layoffs outpacing planned hiring, history says the labor market softening follows within two to three quarters.

For workers, the signal to watch is not the current unemployment rate. It is whether voluntary quits, the job-hopping that signals worker confidence, start falling. When people stop leaving their jobs for better ones, it is usually because they sense the better ones are getting harder to find.

The NewsSparq Takeaway

Three things to hold onto.

One, CEO confidence at 47 is a warning light, not an alarm. Below 50 is concerning, but not catastrophic. The question is whether the underlying conditions improve over the next two quarters or continue to deteriorate.

Two, the layoff plans are the most actionable signal. Planned headcount reductions outpacing planned additions is the first concrete indicator of a labor market shift. Watch the actual layoff announcements in July and August to see if the plans became action.

Three, the Fed is in a bind. It cannot cut rates into elevated inflation, but staying put increases the economic drag for businesses and consumers already feeling squeezed. There is no easy exit from that position, and the people running companies know it.

The official scoreboard says growth continues. The executives running the growth engines say it is getting harder. Both things are true right now, and the question the next six months will answer is which one wins.

Sources: Fox Business, Deloitte Insights, Kiplinger.

By The NewsSparq Editorial Desk

America’s CEOs Just Lost Their Confidence, and a Third of Them Are Planning Layoffs