Business CEO confidence hits highest level in three years

Corporate executives’ confidence has hit a three-year high even as their hopes for economic growth and job creation have dimmed, according to a survey released Tuesday.

The latest Business Roundtable CEO Economic Outlook Index hit its highest level since the second quarter of 2014 as belief grew that pro-growth policies out of the Trump administration would yield long-term benefits. That came even though the executives see GDP growth of just 2 percent in 2017, down from 2.2 percent in March.

“The survey results reflect confidence from America’s leading employers in the prospects for tax reform, as well as the tangible economic benefits that tax reform will produce,” said Business Roundtable Chairman Jamie Dimon said in a statement.

“CEOs are also responding to the administration’s commitment to creating a more favorable regulatory environment, protecting the safety and health of our citizens while also protecting jobs,” added Dimon, who is CEO of JPMorgan Chase, the largest bank by assets in the U.S.

The rising confidence comes amid a volatile backdrop.

President Donald Trump‘s plans to cut taxes, lower regulatory barriers and increase infrastructure spending have been slow to launch since he took office in January. While the administration has been caught up in a thus-far unsuccessful fight to replace Obamacare, the broader economy has struggled. GDP rose just 1.2 percent in the first quarter and the past three months have seen lackluster employment gains.

However, CEOs remain in the belief that the changes eventually will take hold. Indexes for investment and sales both rose, though hiring dipped.

“Business leaders remain confident that Congress and the administration will enact tax reform because the cost of inaction for America’s businesses and workers is too great,” Joshua Bolten, Business Roundtable president & CEO, added in a statement.

The Roundtable’s index for sales rose modestly, from 123.8 in the first quarter to 124.3. Capital spending gained from 82.6 to 87.2, while employment edged lower from 73.6 to 70.3.

The survey has been taken since the fourth quarter of 2002 and is designed to reflect sentiment from corporate leaders regarding general confidence and specifically confidence in investment, employment gains and sales.

Economic numbers lately have been mixed.

Friday’s nonfarm payrolls report showed job creation dipped to 138,000 in May, well below consensus expectations. On Monday, the closely watched ISM nonmanufacturing index registered a 56.9 reading, which represented growth but came in below market expectations.

Broadly speaking, economic data have been missing estimates by a fairly wide margin. The Citi Economic Surprise Index, which measures numbers against expectations, is around its lowest level since February 2016.

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