Do CEOs Think AI Will Replace Jobs? | CEO Insights for What's Ahead

Should the Latest Inflation Data Cause Alarm?

The personal consumption expenditures (PCE) price index—the Fed’s preferred measure of inflation—fell to 2.4% year-over-year in January, down from 2.6% in December.

However, headline inflation spiked to 0.3% on a month-over-month basis, with core PCE inflation coming in at 0.4% m/m. That’s up sharply from 0.1% m/m on both measures in December.

Spending down, incomes up: Following a robust holiday spending season, PCE rose just 0.2% m/m in nominal terms. Accounting for inflation, real consumer spending was down 0.1% in January.

Meanwhile, overall personal income rose 1.0% m/m, up from 0.3% in December. But inflation and taxes zeroed out these gains, leaving real disposable income unchanged.

A bumpy last mile? While January’s upsurge in inflation was worrying, the Fed warned that the path to its 2% target would be bumpy. We still project this target will be achieved this summer, with rate cuts starting in June.

The TCB take: Collectively, these data showed an economy that cooled somewhat as it struggles to slay inflation. With savings depressed and debt loads rising, we expect consumers will have to pull back on spending in the months ahead.

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Number of the Week: 90%

More than 90% of CHROs believe AI will increase workers’ productivity, innovation, and creativity.

Yes, and: Half of CEOs and the C-Suite believe AI will displace labor in their organizations, creating a critical human capital management challenge.

The TCB take: Addressing AI’s impact on labor will require clear communication on how the technology will affect the workforce and what the company plans to do to upskill, retrain, or repurpose employees. CHROs can play a critical role on this front by:

• Supporting the creation and fulfillment of new roles that bring AI expertise to the organization.
• Reskilling workers in job roles that have a high probability to be replaced by AI.
• Developing and implementing AI literacy programs for their entire workforce.
• Modeling experimentation with AI in functions such as recruiting, learning and development, and career planning.
• Advocating for a governance policy that will help mitigate the risks of AI use across the organization.

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QUOTABLE: Election Uncertainty Requires Agile Leadership

“The adjective that CEOs are describing themselves as—the adjective that's most important—is agile. With 70 elections around the world, this fits right into that need to be able to provide agility and pivot when you need to.”

— Dr. Lori Esposito Murray , former President and current Trustee, Committee for Economic Development of The Conference Board. She joined CEO Perspectives ?to discuss 2024?as a landmark election year worldwide.

Amid Regulatory Uncertainty, Companies Can—and Should—Move Ahead with Their Climate StrategieS

Today, the U.S. Securities and Exchange Commission announces, whether it will be adopting its proposed, long-awaited rules that mandate US public companies to report on climate risks.

The TCB take: Companies should keep these three considerations in mind as they brace for potential rules:

• Keep perspective: The new rules will be one part of a broader picture of ESG-related disclosure requirements, including the EU’s Corporate Sustainability Reporting Directive, the International Sustainability Standards Board's reporting standards, and California’s climate legislation.
• Move?ahead: Continue to focus on integrating climate (and other environmental topics) into your business strategy to address risks and opportunities. Don’t let regulation distract or delay your efforts.
• Consider partnerships: Regulations will require companies to discuss topics such as Scope 3 emissions with upstream suppliers and downstream customers. Consider how to make these more than compliance discussions?by focusing on business opportunities as well.

Monitor upcoming ESG regulations ?

Read the report on Europe’s latest sustainability-related regulations ?

Chief Communications Officers Are Poised to Take Center Stage in a Challenging Year Ahead

Last week, more than 300 corporate communications leaders gathered in Manhattan for our Corporate Communications 2024 event.

Leadership needed: All participants acknowledged the probability of heightened turbulence ahead—in the economy, politics, elections, technology, AI, and the evolving role of workers.

The overarching sentiment was that this is another period where CCOs are asked to lead, and leadership is underscored with action. The consensus was clear: In periods of disruption, stakeholders expect companies to act.

Actions speak louder with words: But while action is imperative, the conference concluded that those actions had an amplified impact when they were communicated with clarity, courage, and conviction. As one leader put it, "We have a special skill using the power of words.”

The TCB take: 2024 is shaping up as a year in which communications will be vital for every company. But what stories need to be told remains to be determined.

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