A Cautious Signal or a Testament of Strength?

J.P. Morgan’s 2025 Mid-Year Business Leaders Outlook Pulse Survey, released in July, paints a nuanced picture of sentiment among mid-market business leaders across the United States. On one hand, the results reflect a sharp drop in economic optimism and a notable uptick in recession fears. On the other, business leaders remain largely confident in their companies’ internal performance and are maintaining or adjusting their strategic direction with discipline and resolve. This divergence between macroeconomic uncertainty and micro-level resilience provides critical insights into how U.S. businesses are navigating volatility in 2025.

Optimism Drops Sharply, Recession Expectations Rise

Perhaps the most striking statistic from the survey is the dramatic decline in optimism regarding the national economy. Just 32% of respondents expressed optimism in June 2025, compared to 65% in January—a drop of more than 50% in just six months. At the same time, 25% of executives now expect a recession this year, up from only 8% at the start of 2025.

These numbers clearly indicate a deterioration in economic sentiment. The backdrop of global instability—trade tensions, rising interest rates, regulatory unpredictability, and geopolitical flashpoints—is eroding confidence and prompting business leaders to reassess their operating assumptions.

Strategic Plans on Hold: What’s Driving the Recalibration?

According to the survey, 44% of businesses have either delayed or revised their plans for the year. Among the most cited external factors disrupting decision-making:

Policy uncertainty – 74%

Market volatility – 37%

Shifts in customer demand – 37%

Geopolitical events – 35%

These factors—each complex in its own right—converge to create a difficult operating environment where long-term forecasting becomes tenuous. As a result, many firms are opting to pause capital expenditures, delay hiring, or re-evaluate expansion plans.

This pullback should not be mistaken for paralysis; rather, it reflects a pragmatic adjustment in light of unpredictable circumstances.

Top Three Challenges: Macroeconomics, Tariffs, and Growth Headwinds

When asked to identify their top operational concerns, leaders pointed to three major challenges:

General economic uncertainty – 55%

Tariffs and trade restrictions – 41%

Sluggish revenue and sales growth – 41%

These concerns highlight the external pressures on mid-market companies, particularly those with international exposure or those dependent on imports for raw materials. Tariffs, in particular, remain a significant drag on margin expansion and pricing strategies, especially as global supply chains continue to adjust to post-COVID realities and shifting trade alliances.

Internal Confidence Remains Remarkably Strong

Despite the growing unease about the broader economic landscape, business leaders remain confident in their ability to manage through it. The survey reveals:

85% of respondents expect steady or improved company performance through year-end

78% anticipate revenues will remain stable or grow

73% expect profits to increase or hold steady

37% plan to increase headcount, while 45% expect no change

This suggests that, while the external environment may be turbulent, companies are concentrating on core operations and doubling down on execution. Many are staying the course rather than undertaking drastic changes.

In fact, 40% of leaders said they are making no changes to their business plans, while 14% have even accelerated their strategies, signaling a segment of the market that views volatility as an opportunity.

Strategic Resilience Over Panic: An Executive Perspective

Commenting on the findings, Matt Sable, Co-Head of J.P. Morgan Commercial Banking, emphasized the spirit of adaptability: “Businesses are operating with caution in the current environment. Leaders are recalibrating where necessary to ensure they can continue to deliver for their clients and communities, highlighting their resilience and determination.”

This resilience is particularly notable given the sheer scale of disruption that 2025 has already delivered—from shifting fiscal policy and international conflicts to changes in consumer behavior. Companies that can remain flexible while executing on well-defined strategic priorities are better positioned to withstand shocks and emerge stronger.

Conclusion: A Market Under Stress—But Not in Retreat

In sum, the 2025 Business Leaders Outlook Pulse Survey delivers a complex yet encouraging message. On the one hand, optimism in the national economy has plummeted, and recession fears are clearly on the rise. On the other, companies—particularly in the mid-market segment—are demonstrating operational strength, confidence in their internal metrics, and a disciplined approach to navigating headwinds.

For investors, policymakers, and analysts, the takeaway is clear: while macro-level volatility will likely persist throughout the year, mid-sized American businesses are not capitulating. They are adapting, optimizing, and continuing to move forward with intention.

In a world defined by uncertainty, it is this quiet, steady resolve that may ultimately prove to be the most reliable economic signal of all.