Spend a little time with the average U.S. chief executive and you'll see someone who seems pretty confident -- who spends the day making decisions and giving orders, and not a lot of time second-guessing himself.

But cast an eye over top CEOs' comments on the state of the world economy this quarter and a different picture emerges: One where they don't know what is around the corner.

Uncertain was one of words they most commonly used to describe the current environment, with the heads of Caterpillar Inc , 3M Co and American Express Co all using it in their third-quarter earnings press releases.

Still smarting from one of the worst financial downturns in recent U.S. history, these executives are members of a group of corporate leaders who are clearly unwilling to stick their necks out and declare definitive economic victory.

There is a good deal of economic and political uncertainty in the world, Caterpillar's Doug Oberhelman said, adding that it had not yet showed up in orders for heavy equipment.

American Express' Kenneth Chenault likewise said the card company was preparing itself for surprises.

Against the backdrop of an uncertain economic environment, we are focused on maintaining a strong risk profile, he said.

One thing that is certain is that CEOs are not alone in having no clear sense where the economy is headed.

On Wall Street, the CBOE Volatility Index <.VIX>, the market's favored indicator of anxiety, has more than doubled in the past six month amid big swings in U.S. stocks. In Washington and Brussels, policy makers are struggling with ways to combat stubbornly high U.S. unemployment and a brewing European sovereign debt crisis that threatens to shake the financial system.

Uncertain is a safe but vague choice to describe the current economic environment, said Steve Kleinedler, executive editor of the American Heritage Dictionary.

They are certainly uttering a true statement; they are not committing themselves or their company to anything that they can be held liable for, Kleinedler said, adding that the word suggests circumstances beyond the speaker's control.

Corporate America speaks in numbers as well as words, and the numbers this quarter have been good. Of the 206 companies in the Standard & Poor's 500 <.SPX> that have reported earnings so far, 72 percent have topped analysts' expectations.

But many top CEOs declared conditions to be slower, challenging or volatile, with more than half of the companies in the Dow Jones industrial average <.DJI> that have reported earnings so far this season using one of those labels.

Those who went so far as to say demand was slowing down generally said they were reacting in the way corporate America always does in times of crisis -- cutting costs.

Early evidence suggests slower growth will persist through year-end; therefore we are responding to lower demand with aggressive cost management, said 3M's George Buckley.


In tough times, most CEOs stick to understatement, couching their words so as not to panic investors, customers or staff.

An exception is those whose business model requires a degree of fear -- insurance companies. There the language of loss prevails, but only in reference to the weather.

Travelers Cos Inc's Jay Fishman told investors of unprecedented severe tornadoes and other catastrophes but was more moderate in his words on the economy.

While no one can predict the future, we ... remain cautiously optimistic, he said.

Banks, whose addled shareholders remember the pain of the last recession, turn to the language of warfare in discussing their preparations for any future downturn. Both JPMorgan Chase & Co and Bank of America Corp both said they had built fortresses to protect their finances, a term they have used frequently in recent quarters.

We maintained our fortress balance sheet, said JPMorgan's Jamie Dimon. We are being extremely cautious while navigating through this challenging economic environment

Some research suggests that CEOs are doing the right thing in not spending too much time opining on the economy at large.

A study by New York University accounting professor Baruch Lev, author of Winning Investors Over found that on days when companies reported results that missed analysts' forecasts, their shares performed better when they focused their conference calls on issues specific to them, rather than on the environment.

In effective calls, there are much fewer big-picture discussions by managers, Lev said. Investors, at least in conference calls, are less interested in these big movements from managers. They want managers to focus on the specifics of the business.


CEOs' words seemed aimed at striking a balance between acknowledging the trouble around them while projecting confidence in their own companies and employees. To that end, some blamed others' worry for shaking the economy.

Coca-Cola Co's Muhtar Kent has often said that while shoppers are confused, he is investing in markets including Malaysia, Russia and India that offer clear growth.

You have these investments that are working for us, despite the challenging environment, despite the confused consumer and despite the fact that the general environment is certainly much worse than ideal, Kent said.

Likewise, the head of aluminum maker Alcoa Inc argued that his company tries to look past market worries.

Alcoa is a confident company in a nervous world, said Klaus Kleinfeld. We are well prepared for whatever lies ahead.

NYU's Lev said research has also found that CEOs' words have a strong influence on stock performance.

This is contagious, he said. If managers are ambivalent, or wavering, then investor uncertainty increases and the stocks become more volatile.

(Reporting by Scott Malone in Boston, additional reporting by Martinne Geller and Liana B. Baker in New York, editing by Gerald E. McCormick)