Are CEOs Planning More Layoffs? Shocking Survey Reveals What's Coming | Dana Peterson

Key Concepts

• Geopolitical Uncertainty: Increasing concerns among CEOs regarding global political instability and its impact on business operations.
• CEO Confidence: A leading indicator reflecting executive sentiment about the economy, currently exhibiting weakness.
• Consumer Confidence & Spending: Crucial factors influencing economic direction, with consumers expressing concerns about finances and future economic conditions.
• Federal Reserve (The Fed): Central bank whose policies (particularly interest rates) heavily influence Wall Street and economic activity.
• Inflation & Labor Market: Key metrics monitored by the Fed, with a dual mandate of price stability and maximum employment.
• Leading Economic Indicator (LEI): Composite index published by The Conference Board, signaling potential future economic trends (currently flashing recession signals).
• AI Investment & ROI: Growing corporate investment in Artificial Intelligence, coupled with uncertainty regarding measurable returns on investment.
• K-Shaped Economy: A scenario where economic growth benefits a select segment of the population while others lag behind.
• Basis Points: A unit of measurement used in finance to describe percentage changes in interest rates (100 basis points = 1%).
• CME FedWatch Tool: A market-based indicator of expectations for future Federal Reserve interest rate policy.

Economic Outlook & CEO Sentiment: A Deep Dive

This discussion with Dana Peterson, Chief Economist at The Conference Board, centers on the current economic climate, key indicators, and the perspectives of global CEOs. The overarching theme is uncertainty, impacting both consumer and business behavior.

I. Current Economic Landscape & Key Indicators

The global economy is characterized by significant uncertainty, particularly regarding geopolitics, policy, and regulation. CEOs worldwide express concerns about these factors, perceiving them as disruptive. Consumer confidence is also weak, with individuals worried about their financial future, employment opportunities, and the persistence of elevated prices, even if the rate of price increases slows. Consumers anticipate higher interest rates, posing a challenge to the housing market.

Dana Peterson highlights the importance of monitoring consumer spending and confidence as primary indicators for the US economy in 2026. The Conference Board’s consumer confidence measure, alongside their CEO confidence surveys, provide valuable insights.

II. Wall Street’s Focus & The Federal Reserve

Wall Street’s primary focus remains the Federal Reserve (The Fed) and its anticipated actions. The Fed’s dual mandate – price stability and maximum employment – dictates its policy decisions. While the Fed is pleased with progress towards its 2% inflation target, concerns persist regarding the labor market.

Despite recent small payroll gains, wages continue to grow rapidly, and layoffs remain minimal. This suggests companies are hesitant to reduce their workforce due to ongoing uncertainties surrounding tariffs, regulation, and government spending. This hesitancy is creating a “pileup” of individuals finding it difficult to secure new employment.

III. Political Pressure on the Fed & Monetary Policy

A significant point raised is the recent admission by Jerome Powell, the Fed Chair, regarding political pressure to lower interest rates. This admission, stemming from a DOJ subpoena, raises questions about the extent to which political considerations might influence monetary policy. Dana Peterson acknowledges that political pressure on the Fed is not new, historically central bank independence has been crucial to avoid the pitfalls seen in other countries. However, the current situation is surprising and warrants attention. She believes policymakers will continue to prioritize economic data over short-term political desires.

Regarding future interest rate cuts, the current expectation is for one 25 basis point cut in March and potentially another in June. However, this is contingent on inflation trends and the continued strength of the labor market. If the labor market deteriorates significantly (falling hours, increased layoffs), the Fed may consider more aggressive cuts.

IV. Leading Economic Indicators & Recession Signals

The Conference Board’s Leading Economic Indicator (LEI) has triggered recession signals in recent periods (2024, 2025). However, a formal recession has not materialized. This discrepancy is attributed to the LEI’s components capturing a slump in manufacturing and housing, alongside weak consumer and CEO confidence. However, other sectors, particularly services, have remained strong, and the labor market has remained resilient, preventing a full-blown recession. Consumer spending, while slowing, has remained positive, supported by continued employment and income.

V. CEO Survey Results & Key Concerns (2025/2026)

The Conference Board’s annual CEO outlook survey, conducted for 27 years across the US, Europe, and Asia, reveals that uncertainty is the dominant theme. Specific concerns include:

• Geopolitics: Political polarization and shifting regulatory dynamics are major sources of anxiety. Asian CEOs are particularly concerned about potential conflicts with China and disruptions to oil supplies from the Middle East. European CEOs are focused on Eastern Europe.
• Tariffs: Uncertainty surrounding trade deals and potential tariff increases continues to weigh on CEO decision-making.
• AI Disruption: While viewed as a potential solution to many problems, AI is also seen as a disruptive force, requiring businesses to adapt their models and invest in technological capabilities.
• Regulation & Governance: Navigating the “greening” of the global economy and evolving sustainability regulations presents challenges for multinational firms.
• Labor Market & Skills Gap: Finding workers with the necessary skills remains a significant hurdle, prompting companies to invest in training and upskilling programs.
• Mental Health: Surprisingly, CEOs are prioritizing investments in mental health support for their employees, recognizing its importance for productivity and well-being.

VI. AI Investment & the ROI Challenge

Despite concerns about measuring the return on investment (ROI), corporate investment in Artificial Intelligence (AI) is on the rise. CEOs acknowledge AI’s potential but struggle to quantify its impact. The focus is on utilizing AI to optimize supply chains, enhance marketing efforts, and improve productivity. Companies are prioritizing investments in training their workforce to leverage AI technologies.

VII. K-Shaped Economy & Consumer Behavior

The discussion acknowledges the existence of a K-shaped economy, where economic benefits are unevenly distributed. Wealthier consumers continue to spend, albeit more discreetly, while lower-income consumers prioritize essential goods and services and seek cheaper alternatives. Consumers are adapting their behavior, opting for lower-cost options and reducing discretionary spending.

VIII. Economic Growth Outlook (2025-2026)

The Conference Board has upgraded its GDP growth outlook for the US, projecting growth of around 2.1% in 2026, slightly slower than 2025. This revision is largely attributed to stronger-than-expected consumer spending in Q3 2025. The outlook anticipates a moderation in inflation and a gradual increase in business investment as uncertainties subside.

IX. Career Path for Economists

Dana Peterson advises aspiring economists to gain experience in diverse areas, including government (e.g., the Federal Reserve), the private sector (Wall Street), and economic research institutions. A strong foundation in both economic theory and technical skills (coding, data analysis) is essential. Developing sound judgment through hands-on experience and mentorship is also crucial.

Conclusion:

The current economic environment is characterized by significant uncertainty, impacting both consumer and business sentiment. While recession signals are flashing, a full-blown recession has been averted due to resilient labor markets and continued consumer spending. The Federal Reserve’s actions, geopolitical developments, and the integration of AI will be key factors shaping the economic outlook in the coming years. CEOs are cautiously optimistic, prioritizing adaptability and investment in technology and their workforce.