Dive Brief:

• Confidence rose this month among CEOs of the largest U.S. companies despite their plans to adjust to the hazy economic outlook by trimming payrolls for the third straight quarter, the Business Roundtable found in a survey.
• CEO expectations for sales and capital investment inched up, the Business Roundtable said Thursday. Yet the proportion of CEOs who plan to reduce employment rather than raise it has increased this year to the highest level since the Great Recession, Business Rountable CEO Joshua Bolten said in a statement.
• “CEOs’ softening hiring plans reflect an uncertain economic environment in which AI is driving sizable capex growth and productivity gains while tariff volatility is increasing costs, particularly for tariff-exposed companies, including small businesses,” Bolten said. “We continue to urge our trading partners and the [Trump] administration to stabilize the system and bring tariffs down.”

Dive Insight:

Citing concerns about the weakening labor market, the Federal Reserve on Wednesday cut the main interest rate by a quarter point to a range between 3.5% and 3.75%.

Fed Governor Stephen Miran dissented in favor of a half-point reduction while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid voted against the central bank’s decision because of concern that inflation persists above the Fed’s 2% target.

“I've just been uncomfortable front loading too many rate cuts and assuming that what we've seen in inflation will be transitory,” Goolsbee said Friday. “We don't lose a lot — we don't take a lot of extra risk in my view — to just wait until Q1 2026 to make sure that we're back on path at 2% inflation,” he said in an CNBC interview.

At the same time, falling inflation will probably allow the Fed to cut borrowing costs next year, he said.

“I'm pretty optimistic that for 2026, rates will be able to be a fair bit lower than they are today,” Goolsbee said. Comparing himself with other Fed officials, he said, “I’m one of the most optimistic folks about how rates can go down in the coming year.”

Schmid, the other dissenter in favor of no change to the federal funds rate, flagged concerns about inflation and voiced no willingness to support monetary easing.

“Inflation remains too high, the economy shows continued momentum and the labor market, though cooling, remains largely in balance,” he said Friday.

“I view the current stance of monetary policy as being only modestly, if at all, restrictive,” Schmid said in a statement, adding “I continue to hear concerns about inflation.”

Both Schmid and Goolsbee next year will rotate off the policy-setting Federal Open Market Committee.

Philadelphia Fed President Anna Paulson — set to rotate onto the FOMC in 2026 — voiced concern on Friday about weakness in the job market.

Compared with December 2024, current data “point to a less dynamic labor market,” she said in a speech.

“Hiring has been very concentrated in health care and social services, turnover is low and job finding rates are slowing,” she said.

“In addition, people report being more worried about losing their jobs, but actual layoffs appear to be low,” Paulson said. “The labor market is okay, but downside risks are elevated.”

“On net, I am still a little more concerned about labor market weakness than about upside risks to inflation,” she said.

Among surveyed CEOs, 31% identified labor costs as the biggest force behind inflation, the Business Roundtable said. Fifteen percent identified material costs as the biggest spur to price pressure, while another 15% said the cost of health care is the leading cause for inflation.

The Business Roundtable conducted the survey from Nov. 21, 2025 through Dec. 5, 2025. A total of 164 CEOs completed the survey.