Data & Results – Q4 2022

Dec. 21, 2022

2023 CFO Outlook: Weak Growth; Wages Trail Inflation

U.S. financial executives are generally pessimistic about next year’s economy, saying they expect price growth to subside some in 2023 but still remain high. They also report that wages at their firms have not kept pace with inflation.

News Release
Download Current and Historical Data

  • CFO Optimism

    CFO optimism about the U.S. economy remains at 53 on a scale of 0 to 100, the same as last quarter but well below the historic average of about 60.

  • CFOs’ Most Pressing Concerns

    Inflation remains the top worry of CFOs, alongside availability and quality of labor, and ahead of tightening monetary policy.

  • CFOs’ Expectations for Their Firms’ Performance

    CFOs anticipate their companies’ revenues to grow by only 5 percent in 2023, which is down from last quarter’s 2023 forecast and also less than anticipated 2022 revenue growth.

    CFOs' Growth Expectations for Their Own Firms, by Response QuarterQ4 2022Q3 2022
    Mean (and Median) Expected Year-Over-Year Percentage Change for Calendar Years2022202320222023
    Revenue8.8%
    (8.0%)
    4.7%
    (5.0%)
    9.1%
    (7.0%)
    7.4%
    (6.0%)
    Price8.6% 
    (5.0%)
    5.2% 
    (4.0%)
    7.4% 
    (5.0%)
    5.1% 
    (4.0%)
    Unit Cost9.2%
    (5.0%)
    6.7%
    (5.0%)
    8.9%
    (6.0%)
    6.6%
    (5.0%)
    Employment (full-time)8.6% 
    (3.7%)
    3.3% 
    (2.5%)
    8.4% 
    (2.5%)
    3.5% 
    (2.4%)
    Wage Bill8.7%
    (6.0%)
    6.9%
    (5.0%)
    8.5%
    (6.0%)
    6.8%
    (5.0%)
    Non-wage Compensation--7.5% 
    (5.0%)
    7.8% 
    (6.0%)
    Note: Q4 2022 data in the table reflect results for 282 to 305 U.S. firms responding to the Q4 2022 survey (November 14 – December 2, 2022). Results from the Q3 2022 survey (August 24 – September 9, 2022) are shown for comparison (for 277 to 296 firms). As of Q4 2022 questions on non-wage compensation were discontinued. See additional notes in the chart above.
  • CFOs’ Expectations for the Aggregate Economy

    CFOs expect real GDP to grow by only 0.7 percent in 2023, with 31 percent of CFOs expecting negative real growth.

    Expectations for Real GDP Growth Over Next Four Quarters, by Response QuarterQ4 2022
    (N=273)
    Q3 2022
    (N=274)
    Weighted Mean0.7%0.9%
    Weighted Median0.7%0.9%
    Probability of Negative Growth
    (mean share of probability on bins below zero)
    31.3%30.3%
    Note: Responses are weighted by sales revenue. See additional notes in the chart above.
    Expectations for Stock Market Performance, by Response QuarterQ4 2022Q3 2022
    Expected Annual S&P 500 Returns Over Next 12 Months and Next 10 Years12 Mos
    (N=202)
    10 Yrs
    (N=210)
    12 Mos
    (N=209)
    10 Yrs
    (N=222)
    Worst Case (a 1-in-10 chance the actual return will be less than):-8.1%2.8%-8.3%3.0%
    Most Likely Case3.6%8.5%2.8%9.3%
    Best Case (a 1-in-10 chance the actual return will be greater than):9.7%13.1%9.5%13.9%
    Note: The table shows responses from firms that indicated they closely follow the stock market. Results from the Q3 2022 survey (August 24 – September 9, 2022) are shown for comparison. Responses are unweighted and winsorized at 2.5% and 97.5% to remove the potential influence of extreme values. Please see The CFO Survey Methodology for further information.
    Source: Duke University, FRB Richmond and FRB Atlanta, The CFO Survey – Q4 2022 (November 14 – December 2, 2022)
  • Special Questions on Compensation Increases

    The fourth quarter survey asked CFOs how their company annually adjusts employee compensation, including adjustments for the rate of inflation and/or the cost of living. Most companies reported including a cost-of-living adjustment in the wages they pay their own employees. Among companies that include an explicit cost-of-living adjustment to wages, this adjustment will average 3.3 percent, in addition to merit increases.

    For additional discussion of these results, visit our Research & Commentary section.

    On average, what percent annual increase in total compensation did (or will) your firm provide employees for the most recent compensation round?
    Mean (and Median) Percent Increases, by Type of IncreaseMerit Only
    (N=74)
    Merit
    (N=171)
    Inflation Adjustment
    (N=171)
    Total (Merit + Inflation Adjustment)
    (N=171)
    Recent4.3%
    (4.0%)
    3.1%
    (3.0%)
    3.3%
    (3.0%)
    6.4%
    (6.0%)
    Normal3.5%
    (3.0%)
    3.0%
    (3.0%)
    1.6%
    (2.0%)
    4.8%
    (4.0%)
    Note: Data reflect responses from firms that indicated they provide annual increases in compensation (base of variable) to employees. For comparison, firms were also asked what percent annual increase in compensation would be considered normal, or line with the firm’s recent averages. Merit Only reflects responses from firms that do not incorporate inflation adjustments. Merit, Inflation Adjustment, and Total reflect responses from firms that incorporate inflation adjustments. Responses are unweighted and winsorized at 2.5% and 97.5% to remove the potential influence of extreme values.
    Source: Duke University, FRB Richmond and FRB Atlanta, The CFO Survey – Q4 2022 (November 14 – December 2, 2022)
  • Special Questions on Effects of Interest Rates on Spending

    The fourth quarter survey asked CFOs whether the current level of interest rates was causing them to pull back on capital and non-capital spending plans. About two-thirds of CFOs report that current interest rates have not affected their capital expenditures or non-capital spending plans, while about 30 percent say that rates have already dampened spending plans.

    For additional discussion of these results, visit our Research & Commentary section.

Subscribe to The CFO Survey

Receive an email notification when The CFO Survey updates are posted online.

Subscribe to The CFO Survey

By submitting this form you agree to the Bank's Terms & Conditions and Privacy Notice.