CFO Outlook for 2026: Tariffs, Hiring, Prices, and AI Impact
Data & Results
Dec. 17, 2025
CFOs remain concerned about tariffs and anticipate price increases of more than 3 percent in 2026, while expecting moderate growth in employment and overall economic activity. Widespread increases in AI-related spending are expected, particularly among small firms.
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CFO Optimism
When asked between Nov. 11 and Dec. 1 to rate optimism about the overall U.S. economy on a scale from 0 to 100, the average rating from CFOs was 60.2, a slight dip from 62.9 in the third quarter of the year.
CFOs’ Most Pressing Concerns
Trade policy and tariffs remained the top concern for CFOs for the fourth consecutive quarter. Concerns about demand, sales, and revenue came in a close second. Labor quality and availability also remained a top concern for CFOs.
CFOs’ Expectations for Their Firms’ Performance
In the fourth quarter, CFOs expectations for price and wage growth remained relatively unchanged. They reported expecting higher employment and unit cost growth than they did last quarter.
| CFOs' Growth Expectations for Their Own Firms, by Response Quarter | Q4 2025 | Q3 2025 | ||
|---|---|---|---|---|
| Mean (and Median) Expected Year-Over-Year Percentage Change for Calendar Years | 2025 | 2026 | 2025 | 2026 |
| Revenue | 7.0% (5.0%) | 7.6% (5.0%) | 7.8% (5.0%) | 7.2% (5.0%) |
| Price | 4.5% (3.9%) | 4.2% (3.5%) | 4.6% (3.0%) | 4.1% (3.0%) |
| Unit Cost | 5.4% (4.0%) | 4.5% (3.0%) | 4.7% (4.0%) | 4.3% (3.0%) |
| Employment (full-time) | 3.9% (1.6%) | 2.4% (1.7%) | 2.8% (1.2%) | 2.2% (1.3%) |
| Average Wage | 4.3% (3.5%) | 4.1% (3.0%) | 4.3% (3.5%) | 4.1% (3.0%) |
| Note: Q4 2025 data in the table reflect results for 503 to 544 U.S. firms responding to the Q4 2025 survey (Nov. 11 – Dec. 1, 2025). Results from the Q3 2025 survey (Aug. 18 – Sept. 5, 2025) are shown for comparison (for 484 to 520 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 was 39.6 percent, down from 40.9 percent in the previous quarter.
CFOs’ Expectations for the Aggregate Economy
CFOs’ expectations for real GDP growth over the next four quarters remained relatively unchanged from the third quarter survey. Moreover, the probability respondents assign to negative year-ahead economic growth also remained the same, at 13.6 percent.
| CFOs' Expectations for Real GDP Growth Over Next Four Quarters, by Response Quarter | Q4 2025 | Q3 2025 |
|---|---|---|
| Weighted Mean | 1.9% | 1.8% |
| Weighted Median | 1.9% | 1.8% |
| Probability of Negative Growth | 13.6% | 13.6% |
| Note Q4 2025 data in the table reflect results for 504 U.S. firms responding to Q4 2025 survey (Nov. 11 – Dec. 1, 2025) and that indicate they are familiar with Gross Domestic Product (GDP). Results from the Q3 2025 survey (Aug. 18 – Sept. 5, 2025) are shown for comparison (for 489 firms). Responses are weighted by sales revenue. | ||
| Expectations for Stock Market Performance, by Response Quarter | Q4 2025 | Q3 2025 | ||
|---|---|---|---|---|
| Expected Annual S&P 500 Returns Over Next 12 Months and Next 10 Years | 12 Mos (N=390) | 10 Yrs (N=394) | 12 Mos (N=380) | 10 Yrs (N=382) |
| Worst Case (a 1-in-10 chance the actual return will be less than): | -3.1% | 4.3% | -2.4% | 3.9% |
| Most Likely Case | 6.4% | 9.9% | 6.8% | 9.7% |
| Best Case (a 1-in-10 chance the actual return will be greater than): | 12.3% | 14.8% | 12.4% | 14.6% |
Note: The table shows responses from firms that indicated they closely follow the stock market. Results from the Q4 2025 survey (Nov. 11 – Dec. 1, 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 – Q4 2025 survey (Nov. 11 – Dec. 1, 2025). | ||||
Special Questions on Employment
When asked to assess their firm’s current employment situation in light of the 2026 outlook, over half of respondents said their firms were hiring replacements and 40 percent said they were hiring for new positions. Seventeen percent of firms said they were either laying off workers or not filling open positions.
Of the firms that said they were laying off workers or declining to fill open positions, the number one reason was because of demand uncertainty.
Special Questions on AI
Over the last 12 months, over half of all firms surveyed said they had made expenditures or financial investments in AI technology or solutions. The percentage was much larger for large firms (77.7 percent) than small firms (48.3 percent).
Firms generally expect to invest more in AI over the next 12 months than they did in the last 12 months.
When asked how firms’ use of AI has affected certain outcomes over the last 12 months, respondents generally indicated that there was no change. Some firms, however, reported small improvements to labor productivity, decision-making speed, and time spent on high value-add tasks.
When asked to look at the effects of AI on the same outcomes over the next 12 months, a higher percentage of firms reported expecting improvements across outcomes.
Special Questions on Demand
The fourth 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 47 percent of firms expect demand to increase, and 37 percent expect demand to remain the same.
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