McGraw Tells CNBC: Executives Aren't Worried About Recession

Terry McGraw, chairman of Business Roundtable, told CNBC that CEOs aren’t worried about the economy falling into a recession, though the group's latest survey shows executives have lowered their economic outlook.

“I think the Fed has done a terrific job in terms of bringing the economy down in a more accommodating way,” said McGraw, who is also chairman and CEO of The McGraw-Hill. “I think Fed Chairman (Ben) Bernanke’s comments todaywere right on. He’s less concerned about inflation at this point, although it’s on his watch. He’s watching employment numbers and overall growth. I don’t think there’s any need for a rate reduction at this point or a rate increase.”

Chief executives' outlook on the economy dimmed in the second quarter, though they still expect growth, according to the Business Roundtable's quarterly survey released Tuesday.

The group said its CEO Economic Outlook Index dropped to 81.9 in May from 84.9 in March, matching its December reading. Any number above 50 indicates growth.

Their forecast of U.S. gross domestic product (GDP)growth this year also declined. The CEOs now expect 2.6% GDP growth, compared with a forecast of 2.9% in March.

The majority of CEOs polled -- 66% -- expected their companies' sales to rise over the next six months. Forty-two percent said they expected to increase their U.S. staffing over the next six months and 34 percent expected to raise their capital spending over that period.

The poll of CEOs of the group's 160 member companies was conducted from May 11 through May 23. The member companies have collective revenues of $4.5 trillion.


Contact U.S. News


    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • Have you ever wanted to sleep in the clouds? Well you can in this not one, but two-story penthouse in the Avenue of the Arts in Philadelphia.

  • Ever eat Japanese-inspired Mexican food? Food truck owners Debbie and Derek Kaye sell the uncommon mix at Takumi Taco. But rather than peddling the fare on New York City's streets, they do it in a different mobile way. Marcus Lemonis of CNBC's "The Profit" advises the entrepreneurs about their small business on "The Biz Fix."

  • CNBC's Steve Liesman breaks down the data on Friday's jobs report. And Mark Zandi, Moody's Analytics; Peter Boockvar, The Lindsey Group, Tony Fratto, Hamilton Place Strategies, and Austan Goolsbee, Chicago Booth School of Business, weigh in.