Employment Confidence Index dropped to all time low, reaching 77.1 points, a 17 percent drop from May. Once again, CEOs portrayed a grim outlook on employment with over half (51.9 percent) of the respondents indicating they expect employment to drop over the next quarter.
An accurate predictor of the overall employment rate, the Employment Confidence Index numbers correlate to the jobs data with an approximately six month lag time. According to this historical correlation, employment is expected to remain weak through the Presidential Election.
"CEOs are clearly negative on the economy and they expect things to get worse before they get better," said Edward M. Kopko, Chairman and Publisher of Chief Executive Magazine. "Particularly CEOs' outlook on employment and investment over the next quarter suggests that we are up for a challenging summer and election season."
The Investment Confidence Index was the other component of the CEO Index that reached a historic low, shedding 14.2 points, or 13 percent, to lend at 93.1 points in June. Less than a quarter of respondents (23 percent) said they were planning to increase capital spending at their company while almost 40 percent (39 percent) said they are actually decreasing their spending. One CEO choosing to remain anonymous, stated, "The U.S. government needs to reduce both the regulatory and tax burden on U.S. corporations to encourage domestic capital investment."
