Chief Executive magazine's CEO Index, the nation's only monthly CEO Index, dropped to 63 in July, after showing gradual improvement. All components of the index are down, with Employment Confidence taking the largest hit.

February saw the lowest ebb of the overall CEO Confidence Index at 39.2 increasing to a peak in May of 75.7. Almost nine in ten leaders (88.8 percent) rated the Current Conditions Index as bad, an increase from June (86.3 percent) and May (81.6 percent).

What's worse is that pessimism over employment is reaching new heights. The Employment Confidence Index declined 25 percent with 57 percent of CEOs expecting continued decrease in employment next quarter. Over 95 percent rate the current employment environment as bad - the highest level for 2009. Less than 5 percent think employment conditions are normal and virtually no one (0.4 percent) thinks they are good.

The Capital Spending Index shows a majority of business leaders think capital spending will hold over the next quarter while a sizeable minority (39 percent) expect capital spending to drop. "We're currently treading water," commented one respondent. "Once the federal stimulus dollars stop (our life preserver), we'll sink to the bottom from exhaustion. It would happen anyway. The government is only delaying the inevitable. We need to go through the pain before we can get on the road to recovery."

CEOs' sentiment is mixed on where we are in the slowdown. 33 percent believe the worst is yet to come, 35 percent believe the worst is happening now, and 29 percent believe the worst is behind us. The cause of renewed CEO pessimism has many sources. One respondent remarked, "Healthcare Reform, especially should President Obama's plan be approved will have devastating effects on the economy. Also, the Climate Bill [Waxman-Markey], if approved will have a significant negative impact on the economy." Another commented, "The foolish and politically motivated decisions of the Obama administration is having a permanent and profound effect on all business decisions people are making. There will be no 'rally'." "The current direction of the administration will deepen the downturn and strangle the private sector with increased taxation, unemployment and socialization of business in the US", observed a third CEO.

Though the gloom is pervasive some like Tim Koltek, CEO of Terrapin Energy, are hopeful. "We are both pursuing purchasing capital equipment and proceeding with hiring more personnel. We wouldn't be doing so if we didn't think the worst was behind us."