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.