Tax Revamp Drives Corporate CEOs' Economic Outlook to 15-Year High
Chief executives of the nation's largest companies raised their outlook for spending, hiring, and sales to the highest level in 15 years in the first quarter following the passage of the U.S. tax overhaul, reports the Wall Street Journal (March 14, Chaney). The Business Roundtable CEO Economic Outlook Index reached its highest level in the survey's history. "The Index is a composite of companies' plans for capital spending and hiring, as well as projections for sales, over the next six months," notes the newspaper. The U.S. tax changes included many provisions the Business Roundtable had been advocating, most notably a significantly lower corporate tax rate and lighter taxes on many U.S. firms' foreign earnings. JPMorgan Chase & Co. CEO James Dimon, chairman of the Business Roundtable, expects the survey results to translate into more jobs for Americans. He remarks, "The historic tax-reform law is already prompting more investment, jobs, high wages, and more benefits for workers." The survey of 137 CEOs at large U.S. companies was conducted between Feb. 7 and Feb. 26.
Bloomberg (March 13, Lanman, Condon) adds that the group of CEOs expect the U.S. economy to grow 2.8 percent this year, up from 2.5 percent projected last quarter. Looking at the numbers, the Index advanced to 118.6 -- highest since the survey was launched in 2002 -- from 96.8 in the fourth quarter. Any reading above 50 indicates expansion. Meanwhile, the gauge of capital spending plans in the next six months rose from 92.7 to 115.4, while a measure of hiring expectations increased from 75.7 to 98.5.
According to CNNMoney (March 13, Egan), though,