Optimism about the U.S. economy among the nation’s chief financial officers is at its highest level since 2007 after taking an unprecedented leap in the latest quarter, according to a new survey.
Consider it a “Trump jump,” said John Graham, a finance professor at Duke University’s Fuqua School of Business and director of the CFO survey the school has conducted for more than two decades.
“I don’t believe that it’s just that CFOs are a bunch of Trump supporters, necessarily,” Graham said. Rather, anticipation that the incoming Trump administration will cut corporate taxes and streamline regulations is spurring the sunnier view.
The CFOs’ bullishness isn’t just of academic interest. A jump in the Optimism Index, calculated by asking CFOs how they would rate their outlook for the U.S. economy on a scale of 1 to 100, has proven to be a leading indicator of growth in jobs and the gross domestic product over the coming year.
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The Optimism Index rose to 66.5 in the latest quarter, up from 60.6 last quarter.
The survey also found that nearly two-thirds of the CFOs were more optimistic about the U.S. economy in the latest quarter, compared to 27 percent last quarter. At the other end of the spectrum, just 16 percent were less optimistic, down from 33 percent.
Nearly 1 out of 5 CFOs said their companies plan to increase hiring and spending based on anticipated changes ushered in by the Trump administration, Graham said.
“However, just to be clear, nearly half said they are in a wait-and-see mode,” he added. “There is still a lot of uncertainty.”
The survey also found that CFOs in Mexico are anticipating “a Trump slump” because of the president-elect’s stated goal of stopping U.S. manufacturing jobs from migrating to lower-cost countries and imposing punishing tariffs on companies that do so.
The Optimism Index among Mexican CFOs fell 16 points to just 47.
The survey of more than 1,000 CFOs around the globe, including 367 in North America, was completed last week.