Growing Pessimism in the Corner Office

As Wachovia's unhappy surprise today suggests, the domino effect of last summer's subprime mortgage implosion continues to play out. And everyone, from investors to the C-suite, is worried.

Chief Executives are markedly less confident of the economic outlook for the fourth consecutive quarter, with The Conference Board's C.E.O. Confidence Survey reaching its lowest point since the dawn of the dot-com bust.

"C.E.O.'s assessment of current conditions suggests we're still mired in a period of extremely slow growth, and while their short-term outlook moderately improved, they remain quite cautious," Lynn Franco, director of The Conference Board Consumer Research Center, said.

Three percent of C.E.O.'s said the economy has improved, down from 7 percent last quarter. When asked about whether conditions will improve in six months, 19 percent of chief execs expected so, compared to 16 percent last quarter.

"As a result, hiring plans have been scaled back," Franco said.

Compared with a year ago, when 42 percent of C.E.O.'s expected employment to grow, only 26 percent expect a rise this quarter.

Interestingly, the major hangup in hiring was neither wages nor salaries, but the zooming cost of providing health care.

by Jennifer Lai