CPA business leaders’ view of the U.S. economy has improved to a small degree, but they continue to be wary of inflation and tariff impacts, according to the third quarter AICPA and CIMA Economic Outlook Survey.

This latest survey polled 275 CEOs, CFOs, controllers, and other CPAs at U.S. companies who hold executive and senior management accounting roles.

A little more than a third (34%) of business executives expressed optimism in the U.S. economy’s outlook over the next 12 months, up from 27% in the previous quarter. The Q3 measure is significantly lower than the post-election high of 67% in the fourth quarter of last year but remains higher than the third quarter a year ago, when it stood at 26%.

Uncertainty about inflation and tariff schedules continues to dominate the views of business executives, with 54% saying they expect a recession either this year or next. That’s an improvement from last quarter, when 61% held that view. Inflation displaced “domestic economic conditions” as the top concern of survey participants.

While down from 67% last quarter, a majority (58%) of business executives continue to report moderate to significant uncertainty in business planning due to changing tariff schedules.

Their companies’ main responses so far:

Raising prices (30%)

Reducing operating costs (24%)

Exploring different supply chain options (23%)

Tom Hood

“Survey participants noted some positives, such as pro-business provisions in the recently enacted H.R. 1 and more favorable regulatory policies under the current administration,” Tom Hood, CPA, CGMA, CITP, executive vice president of business engagement and growth at the Association of International Certified Professional Accountants, the alliance formed by the AICPA and CIMA, said in a statement. “But volatility in trade policy continues to pose planning challenges. With tariff effects still playing out, the next quarter could prove pivotal in shaping economic sentiment.”

The AICPA survey is a forward-looking indicator that tracks hiring and business-related expectations for the next 12 months. In comparison, the Labor Department’s August employment report, scheduled for release tomorrow, looks back on the previous month’s hiring trends.

Other key findings of the Q3 survey include:

Hiring remains stable overall but shows some changes at the margins. Sixteen percent of business executives say they are looking to hire new employees immediately, up two percentage points from last quarter. Fourteen percent said they had too many employees, up from 12% last quarter.

Profit and revenue growth both rebounded slightly. Projected revenue growth for the next 12 months is now expected to be 1.5%, the same as a year ago and a 0.5 percentage point increase from last quarter. Profit expectations, negative last quarter, are now expected to be just a little more than break-even at 0.1%.

Thirty-seven percent of business executives are favorable about their own organization’s prospects over the next 12 months, the same as last quarter and down four percentage points from a year ago.

Survey takers who expect their businesses to expand over the next 12 months increased three percentage points to 46%, quarter over quarter.

On the list of major issues besides inflation and domestic economic conditions, the top five was rounded out by employee and benefit costs, materials/supplies/equipment costs and domestic political leadership. “Stagnating/declining markets” jumped two spots to No. 7.

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