Post-Election CFO Optimism Jumps Despite Concerns About Tariffs, Politics, and Inflation
CFO optimism about the economy jumped this quarter, following the recent presidential election. However, chief financial officers expressed post-election concerns about monetary policy, inflation, the political climate, and tariffs.
This quarter, about half of the 515 respondents were polled in a pre-election survey that closed November 4. The other half responded to a post-election survey that ran November 6-19.
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CFO Optimism
Averaged across all 515 responses, own-firm optimism increased about two points this quarter, to 71.2, and optimism about the overall U.S. economy increased about five points, to 65.9. Notably, much of the increase in optimism occurred after the election results were in.
CFOs’ Most Pressing Concerns
In the pre-election survey, the top worry for CFOs was hiring and retaining employees. Following the election, monetary policy jumped to become the top concern, followed by concerns about labor availability, inflation, the political climate, and tariffs. Prior to the election, tariffs had never before appeared on the list of top ten concerns.
CFOs’ Expectations for Their Firms’ Performance
The fourth quarter CFO Survey shows that revenue expectations for 2024 increased, while price, unit cost, employment and average wage expectations for 2024 all decreased.
| CFOs' Growth Expectations for Their Own Firms, by Response Quarter | Q4 2024 | Q3 2024 | ||
|---|---|---|---|---|
| Mean (and Median) Expected Year-Over-Year Percentage Change for Calendar Years | 2024 | 2025 | 2024 | 2025 |
| Revenue | 5.6% (4.0%) | 7.0% (5.0%) | 4.9% (3.2%) | 7.1% (5.0%) |
| Price | 3.3% (3.0%) | 3.6% (3.0%) | 3.4% (3.0%) | 4.0% (3.0%) |
| Unit Cost | 3.9% (3.0%) | 3.7% (3.0%) | 4.1% (4.0%) | 4.0% (3.0%) |
| Employment (full-time) | 4.9% (1.9%) | 3.5% (2.4%) | 5.6% (1.5%) | 3.2% (2.2%) |
| Average Wage | 4.2% (4.0%) | 3.9% (3.5%) | 5.3% (4.0%) | 5.2% (4.0%) |
| Note: Q4 2024 data in the table reflect results for 467 to 506 U.S. firms responding to the Q4 2024 survey (October 21 – November 19, 2024). Results from the Q3 2024 survey (August 19 – September 6, 2024) are shown for comparison (for 427 to 472 firms). Revenue, Price, and Unit Cost are weighted by sales revenue. Employment and Average Wage are weighted by employment. These data are also winsorized at 5% to remove the potential influence of extreme values. | ||||
The share of firms that increased spending (excluding capital expenditures) in the past three months declined to 41 percent from 44.6 percent in the previous quarter.
CFOs’ Expectations for the Aggregate Economy
CFOs’ expectations for real GDP growth over the next four quarters increased slightly from the prior survey.
| Expectations for Real GDP Growth Over Next Four Quarters, by Response Quarter | Q4 2024 | Q3 2024 |
|---|---|---|
| Weighted Mean | 2.3% | 1.9% |
| Weighted Median | 2.3% | 2.0% |
| Probability of Negative Growth (mean share of probability on bins below zero) | 8.5% | 12.6% |
| Note: Q4 2024 data in the table reflect results for 476 U.S. firms responding to the Q4 2024 survey (October 21 – November 19, 2024). Results from the Q3 2024 survey (August 19 – September 6, 2024) are shown for comparison (for 443 firms). Responses are weighted by sales revenue. | ||
| Expectations for Stock Market Performance, by Response Quarter | Q4 2024 | Q3 2024 | ||
|---|---|---|---|---|
| Expected Annual S&P 500 Returns Over Next 12 Months and Next 10 Years | 12 Mos (N=356) | 10 Yrs (N=370) | 12 Mos (N=332) | 10 Yrs (N=340) |
| Worst Case (a 1-in-10 chance the actual return will be less than): | -2.7% | 3.6% | -3.9% | 3.4% |
| Most Likely Case | 7.1% | 9.6% | 6.4% | 9.5% |
| Best Case (a 1-in-10 chance the actual return will be greater than): | 13.4% | 14.7% | 12.5% | 14.6% |
| Note: The table shows responses from firms that indicated they closely follow the stock market. Results from the Q3 2024 survey (August 19 – September 6, 2024) are shown for comparison. Responses are unweighted and winsorized at 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 2024 (October 21 – November 19, 2024) | ||||
Special Questions on Policy Topics
This survey also created the CFO Policy Importance Index, which is scaled so that the most important policy issue facing companies has a value of 100. Following the election, regulatory policy topped the Policy Importance Index with a value of 100, followed by corporate taxes, monetary policy, fiscal spending, individual taxes, and health care.
| Which of the Following Policy Topics Are Most Important to Your Firm? | Pre-Election | Post-Election |
|---|---|---|
| Scaled so the most important policy issues facing firms pre- and post-election has a value of 100. Sorted by post-election importance. | (N=252) | (N=263) |
| Regulatory policy | 98 | 100 |
| U.S. corporate tax policy | 99 | 86 |
| Monetary policy | 100 | 83 |
| Fiscal policy | 74 | 65 |
| U.S. individual tax policy | 70 | 50 |
| Health care policy | 33 | 43 |
| Energy policy | 41 | 33 |
| Trade policy | 32 | 32 |
| Immigration policy | 38 | 29 |
| Foreign policy | 21 | 14 |
| Other | 7 | 9 |
| Non-U.S. tax policy | 3 | 3 |
| None | 2 | 1 |
| Note: Q4 2024 data in the table reflect results for 252 to 263 U.S. firms responding to the Q4 2024 survey (October 21 – November 19, 2024). | ||
For additional discussion of these results, visit our Research & Commentary section.
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