Confidence among U.S. chief executives increased in January as more business leaders said economic conditions are better than they were six months earlier, a private survey showed.
The Young Presidents’ Organization index of sentiment climbed to 61.0 from 59.1 in the previous three months. Readings greater than 50 show the outlook was more positive than negative. The gauge eased in the previous two quarterly surveys, before U.S. lawmakers in January reached a compromise to avert tax increases for most workers that would have kicked in automatically at the start of the year.
“The latest survey results represent a collective sigh of relief that the worst-case scenario has been avoided,” Stephen Slifer, economic adviser for the survey and chief economist at NumberNomics LLC, said in a statement. “But business confidence still has not regained all the ground it lost in the second half of 2012.”
Thirty-nine percent of respondents said the economy has improved from six months earlier, up from 33 percent who said so in the previous survey. Sixteen percent thought conditions had deteriorated, compared with 25 percent in the previous quarter.
Gross domestic product, the value of all goods and services produced, fell at a 0.1 percent annual rate in the fourth quarter as military spending slumped, according to Commerce Department data. Household purchases, which account for about 70 percent of the economy, rose at a 2.2 percent pace in the period, the most since the first three months of 2012.
Forty-two percent said the economy will improve in the next six months, up from 36 percent in October’s survey. Executives’ outlooks for sales and hiring also showed gains.
Companies hired 157,000 workers January, a Labor Department report last week showed, following a revised 196,000 advance in the prior month.
The YPO’s global confidence index increased 2.3 points to 61.3. While sentiment among executives in the European Union remains lowest among all regions, the measure climbed 4 points to 55.4.
The nonprofit service organization’s findings were based on responses from 2,458 global chief executives, including 977 in the U.S., to an electronic survey conducted during the first two weeks of January.