CFOs Concerned About Inflation, Cost Pressures
Financial decision-makers’ outlooks worsened this quarter amid heightened concern over rising costs and prices in the second quarter of 2026. Since the last survey, CFOs added 1.1 percentage points to their firm’s unit cost and price growth projections for 2026.
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CFO Optimism
When asked between May 18 and June 5 to rate optimism about the overall U.S. economy on a scale from 0 to 100, the average rating from CFOs was 60.6, falling slightly from 61.7 in the first quarter of 2026.
CFOs’ Most Pressing Concerns
Inflation jumped back to the top of the list of CFOs’ most pressing concerns, followed closely by non-labor costs. Geopolitical risk appeared on the list for the first time.
CFOs’ Expectations for Their Firms’ Performance
Since the last survey, CFOs added 1.1 percentage points to their firm’s unit cost and price growth projections for 2026.
| CFOs' Growth Expectations for Their Own Firms, by Response Quarter | Q2 2026 | Q1 2026 | ||
|---|---|---|---|---|
| Mean (and Median) Expected Year-Over-Year Percentage Change for Calendar Years | 2026 | 2027 | 2026 | 2027 |
| Revenue | 6.5% (5.0%) |
7.4% (5.0%) |
5.9% (5.0%) |
7.0% (5.0%) |
| Price | 4.7% (3.0%) |
4.1% (3.0%) |
3.6% (3.0%) |
3.6% (3.0%) |
| Unit Cost | 4.5% (4.0%) |
4.0% (3.0%) |
3.4% (3.0%) |
3.3% (3.0%) |
| Employment (full-time) | 3.6% (1.7%) |
2.3% (1.5%) |
2.2% (1.6%) |
2.4% (1.4%) |
| Average Wage | 4.0% (3.1%) |
3.9% (3.0%) |
4.0% (3.0%) |
3.8% (3.0%) |
| Note: Q2 2026 data in the table reflect results for 474 to 524 U.S. firms responding to the Q2 2026 survey (May 18 – June 5, 2026). Results from the Q1 2026 survey (Feb. 17 – Mar. 5, 2026) are shown for comparison (for 420 to 466 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 50.4 percent, increasing from 43 percent in the previous quarter.
CFOs’ Expectations for the Aggregate Economy
Financial executives lowered their expectations for real GDP growth over the next four quarters to 1.8 percent, from 2.1 percent in the prior survey. Moreover, the probability respondents assign to negative year-ahead economic growth edged up slightly to 11.5 percent.
| CFOs' Expectations for Real GDP Growth Over Next Four Quarters, by Response Quarter | Q2 2026 | Q1 2026 |
|---|---|---|
| Weighted Mean | 1.8% | 2.1% |
| Weighted Median | 2.0% | 2.0% |
| Probability of Negative Growth | 11.5% | 11.0% |
| Note: Q2 2026 data in the table reflect results for 489 U.S. firms responding to the Q2 2026 survey (May 18 – June 5, 2026) and that indicate they are familiar with Gross Domestic Product (GDP). Results from the Q1 2026 survey (Feb. 17 – Mar. 5, 2026) are shown for comparison (for 447 firms). Responses are weighted by sales revenue. | ||
| Expectations for Stock Market Performance, by Response Quarter | Q2 2026 | Q1 2026 | ||
|---|---|---|---|---|
| Expected Annual S&P 500 Returns Over Next 12 Months and Next 10 Years | 12 Mos (N=367) |
10 Yrs (N=372) |
12 Mos (N=328) |
10 Yrs (N=326) |
| Worst Case (a 1-in-10 chance the actual return will be less than): | -2.2% | 4.1% | -2.8% | 3.6% |
| Most Likely Case | 7.8% | 9.7% | 6.6% | 9.3% |
| Best Case (a 1-in-10 chance the actual return will be greater than): | 14.2% | 14.8% | 12.4% | 14.4% |
|
Note: The table shows responses from firms that indicated they closely follow the stock market. Results from the Q1 2026 survey (Feb. 17 – Mar. 5, 2026) 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 Fuqua School of Business, Federal Reserve Banks of Richmond and Atlanta, The CFO Survey – Q2 2026 (May 18 – June 5, 2026) |
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Special Questions on Employment
In the second quarter of 2026, there was a slight decrease in the number of firms hiring and a jump in the number of firms laying off workers.
Of firms that said they were laying off workers or not filling open positions, 57.1 percent reported doing so due to demand uncertainty.
Special Questions on Demand
The second quarter survey also asked firms how they expect demand for goods and services over the next 12 months to compare with the past 12 months. About 57 percent of firms expect demand to increase, and 31 percent expect demand to remain about the same.
Special Questions on Oil Prices
Firms were asked how the increase in oil prices since Feb. 27 had impacted their unit costs, prices, and demand. Two-thirds of firms reported increased costs, while only one-third of firms reported increased prices.
On the demand side, the vast majority of firms reported little to no change due to increased oil prices.
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