CEO Confidence in Economy Soars to 3-Year High With Trump in Office

In the first quarter of 2025, CEO confidence in the U.S. economy has soared to its highest level in three years, coinciding with President Donald Trump’s second term. This surge in optimism among business leaders contrasts with growing consumer concerns about inflation and economic policies.

Why It Matters

Recent data reveals a notable decline in consumer confidence regarding the U.S. economy. The Conference Board’s Consumer Confidence Index® decreased 5.4 points in January, following a 3.3-point drop in December, indicating growing consumer pessimism. This sentiment is further underscored by a Reuters/Ipsos poll showing that 53 percent of Americans believe the economy is on the wrong track, up from 43 percent in January.

Despite these consumer concerns, CEOs exhibit increased optimism about current and future business conditions, as evidenced by The Conference Board Measure of CEO Confidence™, which rose significantly in the first quarter of 2025. This divergence between consumer and CEO perspectives highlights contrasting outlooks on the U.S. economy’s trajectory.

What To Know

The Conference Board’s Measure of CEO Confidence™, conducted in collaboration with The Business Council, revealed a significant rise in optimism among chief executives in the first quarter of 2025. The survey, which included 134 CEOs between January 27 and February 10, showed that 44 percent of CEOs reported that economic conditions had improved compared to six months ago, a significant increase from just 20 percent in the previous quarter.

Meanwhile, only 11 percent of CEOs believed that economic conditions had worsened, a notable decrease from 30 percent in Q4 2024. This shift indicates a growing optimism among chief executives regarding the current economic landscape.

The survey also showed 60 percent planned to increase salaries by 3 percent to 3.9 percent over the next 12 months and 33 percent plan to increase capital spending in the next 12 months, which is an 8-percentage-point increase from the previous quarter.

Brian Marks, executive director of the Entrepreneurship and Innovation Program at the University of New Haven, told Newsweek CEOs are optimistic because they focus on long-term business conditions rather than immediate economic pressures. They expect the Trump administration to roll back regulations, reduce costs and create new opportunities for growth. However, he cautions that this optimism may be premature, as uncertainty around Trump’s policies could still impact the economy in unpredictable ways.

The optimism among business leaders stands in contrast to consumer sentiment. A Gallup poll conducted in mid-February 2025 showed 54 percent of Americans disapprove of his handling of the economy, and 53 percent disapprove of his approach to foreign trade. Inflation concerns are also prominent, with the U.S. Bureau of Labor Statistics reporting a 3 percent increase in consumer prices over the past year, driven by rising costs in essentials such as car insurance, healthcare and airline tickets.

Marks noted consumers feel the immediate effects of inflation, rising prices and potential tariff-driven cost increases. Unlike CEOs, who plan for the future, consumers are focused on their day-to-day expenses, such as groceries and household bills. The uncertainty around Trump’s trade policies, particularly regarding tariffs on imported goods, adds to their concerns.

What People Are Saying

Brian Marks, executive director of the Entrepreneurship and Innovation Program at the University of New Haven, told Newsweek: “Quite frankly, it is too soon to fully assess the situation. There are many [unknowns as] to Trump Administration policies, all of which could have a substantial impact on the economy. I would posit, which may be a reflection of my bias in uncertain environments, that the CEOs may be too optimistic while consumers may be too pessimistic, over-valuing the uncertainty discount.”

Stephanie Guichard, senior economist, global indicators at The Conference Board, said in a press release: “The improvement in CEO Confidence in the first quarter of 2025 was significant and broad-based. All components of the Measure improved, as CEOs were substantially more optimistic about current economic conditions as well as about future economic conditions—both overall and in their own industries. CEOs’ assessments of current conditions in their own industries also improved. …Consistent with an improved expected outlook, there was a notable increase in the share of CEOs expecting to increase investment plans and a decline in the share expecting to downsize investment plans.”

Thomas Gift, an associate professor of political science and the director of the Centre on U.S. Politics at University College London, previously told Newsweek: “Americans are coming to grips with the reality that there’s no silver bullet on inflation. While several of Joe Biden’s stimulus packages overheated the economy and arguably made the cost-of-living crisis worst, many of the drivers of inflation are structural, related to supply chains, and can’t be reversed overnight. It’s also hard to think of two policies that would be more inflationary than mass deportations and tariffs, both of which Trump has made the centerpiece of his platform. The idea that electing Trump would suddenly drop the price of eggs and milk was always unrealistic. Apparently, some voters are just starting to recognize this hard truth.”

What Happens Next

While business leaders are poised to increase investments, consumer apprehension about inflation and economic policies could temper overall economic growth. The next key indicator of Trump’s economic performance will be the Consumer Price Index (CPI) report, set to be released on March 12, 2025. This report will provide further insights into inflation trends and help gauge the effectiveness of current economic policies.