Commentary by Stephen Macaulay
The Business Roundtable is an organization consisting of CEOs of more than 200 US-based companies. One of its objectives is to “develop and advocate directly for policies to promote a thriving US economy and expand opportunities for all Americans.”
Or to put it another way: the Business Roundtable is all about improving conditions for businesses to make money, which is, after all, the role of a business.
Each quarter the Business Roundtable releases a “CEO Economic Outlook Index,” which provides an indication of what CEOs think about in terms of hiring and capital spending — things they directly control -- and sales, which they can’t control but must plan for, for the next six months.
Last week it released its numbers for Q4 2025, and while there was improvement in outlook, the index “remains below the historic average.” But really by just a smidge. The average is 83 and this quarter’s number is 80.
Chuck Robbins, chair and CEO of Cisco, and the Business Roundtable chair, said that CEOs are “approaching the first half of 2026,” but that “they are starting to see opportunities for growth.”
Which sounds rather cautious, certainly not bullish.
Realize that Robbins’ day job at Cisco probably has something to do with this carefully worded, PR-massaged statement. After all, he certainly wants to keep the fortunes of the digital communications tech firm he heads going in the right direction (i.e., up).
But Business Roundtable CEO Joshua Bolten doesn’t have direct connection with shareholders so his statements can be more to the point.
And so there’s this: “Notably this quarter, more CEOs plan to reduce employment than increase it for the third quarter in a row — the lowest three-quarter average since the Great Recession”
Now a bit of chronology is in order. Three quarters in a row mean three quarters during which time Donald Trump has owned the economy.
And realize that the Great Recession began during the watch of George W. Bush, so this “lowest three-quarter average” can’t be blamed on “Biden,” as Trump likes to utter with a sneer of contempt (did you ever notice that past presidents seemed to have at least a cordial relationship with their predecessors . . . before Trump?)
Bolten went on to say, “CEOs’ softening hiring plans reflect an uncertain economic environment in which AI is driving sizeable capex growth and productivity gains while tariff volatility is increasing costs, particularly for tariff-exposed companies, including small businesses. We continue to urge our trading partners and the Administration to stabilize the system and bring tariffs down.” (“Capex” is biz-talk for “capital expenditure”.)
The sizeable capex growth he refers to related to AI goes to things like Cisco equipment, NVIDIA chips, and the massive spending by the likes of Amazon ($125 billion) and Google ($93 billion) on AI infrastructure. AI investment is thought to have contributed to more than half of the GDP growth in the US during the first half of 2025.
But then there’s the stuff that’s available in the supermarkets and on the shelves of Target and in the parking lots at car dealers: “Tariff volatility is increasing costs, particularly for tariff-exposed companies, including small businesses. We continue to urge our trading partners and the administration to stabilize the system and bring tariffs down.”
The increased costs are increased costs to businesses which then are going to be passed along to consumers. As previously mentioned, the purpose of a business is to make money, and for the Business Roundtable-caliber companies, the money goes to shareholders.
Many companies have been absorbing the costs of the tariffs during the past several months, but that means they are spending money that might otherwise go to shareholders. Consequently, that’s going to go by the wayside and prices are going to go up.
And then we have reduced employment, which is going to make it increasingly hard for people to pay for anything.
This whole MAGA thing just doesn’t seem to be going the way it was described.
Macaulay is pundit-at-large for The Hustings where he writes primarily for the right column.
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