Economic surveys tell which way the wind is blowing today, not tomorrow

Surveys of economic optimism or pessimism, regardless of who’s being surveyed, are like political polls: what they say today could change tomorrow, and what they say tomorrow could have little resemblance to what they say a week or month from now. It’s like the wind: the direction can change quickly.

Nevertheless, what economic optimism — or pessimism — surveys show has an impact.

As with political polls, economic outlook surveys are popular, because they are generally easily translatable numbers. For example, if a survey says 60% of CEOs or CFOs are optimistic or pessimistic about the economy, it can stimulate the interest of people trying to figure out what they should do about investing, savings, business expansion, retraction and other decisions.

Surveys engage with many audiences — consumers, accountants, CEOs, CFOs, nonprofit executives and more — because each audience has its own interests and needs.

The Federal Reserve Bank of Richmond has explored the effects of survey findings on economic behavior:

“Expectations about the future are important drivers of the economy. For instance, a more pessimistic outlook can lead households to save more and firms to hire less. These individual decisions can lead to aggregate fluctuations in output, employment and prices. Survey data allow us to measure how the expectations of different economic agents fluctuate over time, providing evidence to test theories of expectation formation and allowing us to quantify their effects.”

Attitudinal ups and downs in survey research results are the challenge to using them as barometers by which to make potentially significant personal or business decisions. For example:

• Up: May 5, Gallup: “Americans Offer Upbeat Outlook for Key Economic Factors.“ Americans are the most optimistic they have been in the past seven years about several aspects of the U.S. economy, particularly economic growth and the stock market. Majorities of Americans expect both indicators of economic health to go up this year, while 41% are hopeful that interest rates will fall, exceeding the 35% saying interest rates will rise.”

• Down: June 5, Journal of Accountancy: “Economic optimism slides again over tariff uncertainty. “Optimism about the domestic economy plummeted from 67% in the fourth quarter of 2024 to 47% in the first quarter to just 27% this quarter, the latest Economic Outlook Survey shows. The survey, released Thursday by the AICPA and CIMA, polled 328 CPA decision-makers in business and industry, mainly CEOs, CFOs and controllers.”

• Up: June 10, National Federation of Independent Businesses: “Taxes are now small business owners’ single most important problem: “The NFIB Small Business Optimism Index increased by three points in May to 98.8, slightly above the 51-year average of 98. Expected business conditions and sales expectations contributed the most to the rise in the index.”

Factors affecting optimism? Tax cuts, tax increases or even no tax changes; interest rates declining, increasing or holding steady; international tensions; energy supply disruptions or improvements; and other developments, including the unforeseen, all influence consumer and business confidence.

What this says about general economic surveys is that they’re useful, but perhaps often for entertainment. Industry-specific, detailed and scientific surveys are more valuable, but still influenced by the factors previously listed.

In making plans, use surveys as a reference point, but not as dominant factors. Instead, working with accounting professionals or financial advisers, map out a personal or business plan that anticipates future difficulties, as they’re coming anyway. Such a plan should explore your individual financial standing, your business’ industry sector and elements specific to you or your business, as well as your experience and goals. A thorough, professionally planned approach elevates your potential for success, no matter which way the wind is blowing right now.

This originally appeared on KnoxNews.