Data & Results

Dec. 20, 2023

The 2024 Economic Outlook: A View from CFOs

Financial decision-makers were slightly more optimistic about the U.S. economy in the fourth quarter, and many firms expect their price growth next year to remain above pre-COVID levels.

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  • CFO Optimism

    When asked between November 14 and December 1 to rate optimism about the overall U.S. economy on a scale from 0 to 100, the average rating from CFOs was 58.0, up from 56.2 in the third quarter. Optimism about their own firm’s prospects remained higher than economic optimism, at an average of 67.3, but fell from 67.8 in the third quarter.

  • CFOs’ Most Pressing Concerns

    For the second consecutive quarter CFOs ranked monetary policy as a top business concern. Labor quality and availability was also top of mind for CFOs.

  • CFOs’ Expectations for Their Firms’ Performance

    Revenue and employment expectations for 2024 remained solid.

    • Median expected employment growth stands at 2.7 percent for 2024—up from 2.2 percent in 2023.
    • Median revenue growth is expected to remain steady at 5 percent for 2024.
    • Median price and unit cost growth are expected to slow from 5 percent this year to 3 percent and 4 percent, respectively, in 2024.
    CFOs' Growth Expectations for Their Own Firms, by Response QuarterQ4  2023Q3 2023
    Mean (and Median) Expected Year-Over-Year Percentage Change for Calendar Years2023202420232024
    Revenue3.8%
    (5.0%)
    6.0%
    (5.0%)
    3.6%
    (5.0%)
    6.7%
    (5.0%)
    Price4.3%
    (5.0%)
    4.1%
    (3.0%)
    5.8%
    (5.0%)
    4.2%
    (3.0%)
    Unit Cost5.7%
    (5.0%)
    4.7%
    (4.0%)
    6.9%
    (5.0%)
    5.1%
    (4.0%)
    Employment (full-time)5.1%
    (2.2%)
    3.3%
    (2.7%)
    0.6%
    (0.0%)
    3.9%
    (2.2%)
    Wage Bill6.0%
    (5.0%)
    5.3%
    (4.0%)
    5.9%
    (4.5%)
    5.4%
    (4.0%)
    Note: Q4 2023 data in the table reflect results for 400 to 439 U.S. firms responding to the Q4 2023 survey (November 14 – December 1, 2023). Results from the Q3 2023 survey (August 21 – September 8, 2023) are shown for comparison (for 276 to 318 firms) and have been revised to incorporate additional respondents that were previously missing 2022 revenue and employment levels. Revenue, Price, and Unit Cost are weighted by sales revenue. Employment and Wage Bill are weighted by employment. These data are also winsorized at 2.5% and 97.5% to remove the potential influence of extreme values.

    In spite of generally positive expectations for 2024, there was some indication that firms were cutting back—for example, the share of firms that report increased spending continued to shrink.

  • CFOs’ Expectations for the Aggregate Economy

    Growth expectations for gross domestic product for the next year were upgraded to an average of 1.7 percent from 1.3 percent last quarter, alongside a decrease in the probability that respondents assigned to economic contraction.

    Expectations for Real GDP Growth Over Next Four Quarters, by Response QuarterQ4 2023Q3 2023
    Weighted Mean1.7%1.3%
    Weighted Median1.7%1.4%
    Probability of Negative Growth
    (mean share of probability on bins below zero)
    13.5%19.6%
    Note: Q4 2023 data in the table reflect results for 405 U.S. firms responding to the Q4 2023 survey (November 14 – December 1, 2023) and that indicate they are familiar with Gross Domestic Product (GDP). Results from the Q3 2023 survey (August 21 – September 8, 2023) are shown for comparison (for 282 firms) and have been revised to incorporate additional respondents that were previously missing 2022 revenue levels. Responses are weighted by sales revenue.
    Expectations for Stock Market Performance, by Response QuarterQ4 2023Q3 2023
    Expected Annual S&P 500 Returns Over Next 12 Months and Next 10 Years12 Mos
    (N=292)
    10 Yrs
    (N=308)
    12 Mos
    (N=207)
    10 Yrs
    (N=210)
    Worst Case (a 1-in-10 chance the actual return will be less than):-4.4%3.5%-4.7%3.2%
    Most Likely Case5.3%8.9%4.9%8.7%
    Best Case (a 1-in-10 chance the actual return will be greater than):10.9%13.4%10.6%13.0%
    Note: The table shows responses from firms that indicated they closely follow the stock market. Results from the Q3 2023 survey (August 21 – September 8, 2023) 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 2023 (November 14 – December 1, 2023)
  • Special Questions on Firm Activity Relative to Norms

    To better understand how firm activity compares to pre-pandemic norms, the CFO survey asked firms to compare their 2024 expected growth in revenue, prices, and employment to growth rates prior to the Covid-19 pandemic. The fourth quarter survey also asked firms about their most recent percent annual increase in total compensation and how it compares to normal.

    Almost 60 percent of firms expect their price growth in 2024 to remain elevated relative to pre-COVID norms. Expectations for compensation growth also remain above what firms consider normal.

    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? What would be considered normal, or in line with your firm’s recent averages?Q4 2023 Q4 2022
    Mean (and Median) Percent Increase(N=423)(N=245)
    Recent4.6%
    (4.0%)
    5.9%
    (5.0%)
    Normal
    4.2%
    (4.0%)
    4.5%
    (4.0%)
    Note: Data reflect responses from firms that indicated they normally provide annual increases in compensation to employees. Results from the Q4 2022 survey (November 14 – December 2, 2022) are show for comparison. Responses are unweighted and winsorized 95% to remove the potential influence of extreme values.Source: Duke University, FRB Richmond and FRB Atlanta, The CFO Survey – Q4 2023 (November 14 – December 1, 2023)
  • Special Questions on Firm Debt, Maturity, and Roll-Over

    The fourth quarter CFO Survey asked firms for their debt maturity profile, the proportion of maturing debt they plan to roll over, and their expected borrowing costs, to better understand the potential impact of increased interest rates.  

    Seventy percent of respondent firms—and almost 90 percent of large firms—have existing debt, much of which is expected to come due in the next few years. Firms that intend to roll over their debt are facing higher interest costs, which suggests that there could be some headwinds to economic growth in 2024.

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

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