Last February, Kathy asked me when I thought the economy would start to improve. I laughed and said the answer was obvious--it would start to improve after the national elections in November.
Today, I read the following:
"It's just more of the same," said John Canally, an economist with LPL Financial. "This data doesn't break out of the range, and that's going to continue until companies can see their way to adding some jobs."
Canally points to the latest productivity numbers released in a separate report on Tuesday that show companies may have stretched their employees too thin. The Labor Department said worker productivity fell 0.9% in the second quarter, the first decline in 18 months.
That data may mean employers need to start hiring again. But instead, companies have been spending on new equipment and capital - rather than their payrolls - as they remain skeptical of the economic outlook, he said.
"Companies have the cash. Their profits are good. They have credit if they need it. They just haven't been willing to step up new hiring," Canally said.
I've read elsewhere that the companies are holding over three trillion dollars in reserve, not spending it and not borrowing money for expansion despite the low interest rate.
I can't blame them, many business owners and/or operators are in the higher tax brackets (>$250K) that will be effected if President Obama and the Democrats have their way. Holding back the economy will help these high-rollers get the folks they want in power.
Still, the wait is a bit hard on the rest of us, especially those who are looking for work or looking to change jobs.