CFOs Report Increased Optimism as Uncertainty Fades
The outlook for the U.S. economy among financial decision-makers improved somewhat in the third quarter of 2025, as uncertainty declined. However, concerns about the impact of tariffs on prices and business performance continued to weigh on firms.
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CFO Optimism
When asked between Aug. 18 and Sept. 5 to rate optimism about the overall U.S. economy on a scale from 0 to 100, the average rating from CFOs was 62.9, a jump from 60.9 in the second quarter of the year.
CFOs’ Most Pressing Concerns
Trade policy and tariffs remained the top concern for CFOs for the third consecutive quarter. Concerns about monetary policy and inflation jumped up to claim the second and third spots.
CFOs’ Expectations for Their Firms’ Performance
The third quarter results show that CFOs expect to see revenue increase in 2025 and 2026, while they reported tempered expectations for price and unit cost growth.
| CFOs' Growth Expectations for Their Own Firms, by Response Quarter | Q3 2025 | Q2 2025 | ||
|---|---|---|---|---|
| Mean (and Median) Expected Year-Over-Year Percentage Change for Calendar Years | 2025 | 2026 | 2025 | 2026 |
| Revenue | 7.8% (5.0%) | 7.2% (5.0%) | 5.4% (5.0%) | 7.1% (5.0%) |
| Price | 4.6% (3.0%) | 4.1% (3.0%) | 4.8% (3.5%) | 4.3% (3.0%) |
| Unit Cost | 4.7% (4.0%) | 4.3% (3.0%) | 5.2% (4.0%) | 4.4% (3.0%) |
| Employment (full-time) | 2.8% (1.2%) | 2.2% (1.3%) | 2.5% (0.8%) | 2.6% (1.4%) |
| Average Wage | 4.3% (3.5%) | 4.1% (3.0%) | 4.0% (3.0%) | 3.9% (3.0%) |
Note: Q3 2025 data in the table reflect results for 483 to 519 U.S. firms responding to the Q3 2025 survey (Aug. 18 –Sept. 5, 2025). Results from the Q2 2025 survey (May 19 – June 6, 2025) are shown for comparison (for 451 to 496 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 grew to 40.9 percent, up from 36.3 percent in the previous quarter.
CFOs’ Expectations for the Aggregate Economy
CFOs revised upward their expectations for real GDP growth over the next four quarters to 1.8 percent from 1.4 percent in the prior survey. Moreover, the probability respondents assign to negative year-ahead economic growth decreased to 13.6 percent from 22.7 percent last quarter.
| CFOs' Expectations for Real GDP Growth Over Next Four Quarters, by Response Quarter | Q3 2025 | Q2 2025 |
|---|---|---|
| Weighted Mean | 1.8% | 1.4% |
| Weighted Median | 1.8% | 1.3% |
| Probability of Negative Growth | 13.6% | 22.7% |
Note Q3 2025 data in the table reflect results for 487 U.S. firms responding to the Q3 2025 survey (Aug. 18 – Sept. 5, 2025) and that indicate they are familiar with Gross Domestic Product (GDP). Results from the Q2 2025 survey (May 19 – June 6, 2025) are shown for comparison (for 465 firms). Responses are weighted by sales revenue. | ||
| Expectations for Stock Market Performance, by Response Quarter | Q3 2025 | Q2 2025 | ||
|---|---|---|---|---|
| Expected Annual S&P 500 Returns Over Next 12 Months and Next 10 Years | 12 Mos (N=380) | 10 Yrs (N=382) | 12 Mos (N=352) | 10 Yrs (N=358) |
| Worst Case (a 1-in-10 chance the actual return will be less than): | -2.4% | 3.9% | -4.2% | 3.8% |
| Most Likely Case | 6.8% | 9.7% | 5.0% | 9.6% |
| Best Case (a 1-in-10 chance the actual return will be greater than): | 12.4% | 14.6% | 10.7% | 14.8% |
Note: The table shows responses from firms that indicated they closely follow the stock market. Results from the Q2 2025 survey (May 19 – June 6, 2025) 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 – Q3 2025 (Aug. 18 – Sept. 5, 2025) | ||||
Semiannual Questions on Investment
The third quarter CFO Survey included a semiannual investment module to ask participants about their recent structures and equipment investment decisions. The share of firms planning investments over the next six months showed little change from the first quarter.
Special Questions on Price and Cost Expectations
When asked if price or cost expectations for 2025 and 2026 had been affected by the implementation of tariffs or uncertainty around tariffs/trade policy, almost half of firms said yes.
46.5 percent of firms said price expectations were affected, while 49.6 percent said the same for cost expectations.
For additional discussion of these results, visit our Research & Commentary section.
Special Questions on Hiring and Capital Spending
Roughly 20 percent of firms reported that trade/tariff policy would negatively impact their hiring plans in 2025 and a quarter reported that it would negatively impact their capital spending plans. Firms reported being least concerned about corporate tax policy.
The majority of firms reported that they plan to hire for either replacements or new positions in the remainder of 2025.
Of the roughly 15 percent of firms who said they were not filling open positions or were laying off workers, the majority of firms cited demand uncertainty and financial constraints as the reason.
Special Questions on Demand
The third quarter survey also asked firms how they expect demand for goods and services over the next 12 months to compare to the past 12 months. About half of firms expect demand to increase, and a third expect demand to remain the same.
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