CEO Insights for What's Ahead | 9.6.23
Number of the Week: 3.8%
The US unemployment rate rose in August 2023 to 3.8%, up from 3.5% in July.
While the economy continues adding jobs—with payrolls increasing by 187,000 in August—last week’s Bureau of Labor Statistics report confirmed clear signs of cooling in the labor market.
Job growth losing steam: Revisions lowered the number of jobs added in June and July by a combined 110,000, bringing the three-month average to just under 150,000—the lowest since December 2019.
This is consistent with Job Openings and Labor Turnover Survey (JOLTS) data showing job openings, voluntary quits, and hiring are down—all of which the Fed should view constructively in its tightening campaign.
Wages cool—but not yet enough: Average hourly earnings growth continued to slow to 4.3% year-over-year in August. That’s down substantially from last year’s peak of 5.9%, but still well above pre-pandemic levels, contributing to underlying consumer inflation. We thus expect the Fed to raise interest rates at least once more before the end of 2023.
Further cooling ahead: August’s gains were again concentrated in in-person services, while industries that boomed during the pandemic like transportation and warehousing and temp help—a leading indicator for hiring—continued to shed jobs.
In sum, August’s data reinforce our forecast for a short and shallow recession by Q4 2023 or Q1 2024, with further upticks in the unemployment rate likely.
Setting Corporate Strategy with the Broader ESG Picture in Mind
At a recent ESG Center roundtable, 54% of executives said they are effectively linking their company’s strategy to broader environmental goals. Only 41% said that of broader economic goals—and just 33% said that of social goals.
What the data reveal: Companies are integrating ESG into their strategy not only to achieve success for their firm, but also to address broader societal objectives. While the Paris Agreement provides a relatively well-established set of societal goals with respect to climate change, we do not have the same level of consensus and clarity on other environmental, social, and economic objectives, or on the public and private sectors’ respective roles in achieving them.
The path forward: Along with clearer overall goals, companies need a more consistent methodology for measuring and reporting on the ROI of ESG; a long-term perspective as sustainability investments can have long payback periods; a heightened level of horizontal and vertical collaboration to achieve their ESG goals; and the fortitude to withstand both backlash against, and skepticism about, their ESG efforts.
Sponsored by PwC and Weil, Gotshal & Manges
Six CEOs Get Candid on Leadership in Challenging Times
The 2023 Leadership in Challenging Times series interviews the outstanding business leaders who are the recipients of the Distinguished Leadership Awards, hosted by the Committee for Economic Development, the public policy center of The Conference Board (CED).
The series features conversations with:
Why it matters: By shining a light on these executives and companies, we inspire business and public policy leaders more broadly to follow in their footsteps.
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What Skills Will a Brilliant CMO Need in the Future?
The role of the Chief Marketing Officer (CMO) seems to be constantly evolving as companies respond to the changing technological, social, and economic landscape.
Yogi’s maxim of marketing: As a famous baseball player once said, “It is difficult to make predictions, especially about the future.” Today’s CMOs seem to agree.
When The Conference Board asked them which critical skills aspiring CMOs would need to focus on developing for the future, what stood out weren’t specific technical skillsets or qualifications. Instead, the key themes were flexibility, adaptability, wide-ranging business experience, and confidence collaborating across domains and functions.
Breaking down silos: The traditional skills of marketing leadership remain—driving growth requires sharp business acumen, holistic thinking, and creativity—but the ability of a CMO to connect with other leaders, understand their drivers, and then influence them to garner support becomes more important.
Marketing leaders of the future will need to develop differential powers of influence.
QUOTABLE: Returning to the Office
“I don't see a 100 percent return to back-in-the-office…At the same time, we know there's a detriment to working from home that has to do with mental health, because there's a sense of isolation; there's a sense of disconnectedness. And I think over time, that can have an impact on how a team works together…Hybrid is here to stay…We have to find the right balance.”
— Diana Scott , Leader of the US Human Capital Center at The Conference Board. On the heels of Labor Day, she joined the CEO Perspectives podcast to discuss work arrangements, including the pros and cons of returning to the office.
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