News/Blog
Good News Friday: Which Came First…
The economy is locked in a stalemate. Businesses won’t hire until they see consumers spend more, and consumers won’t spend more until they have a job or feel secure in the job they have. Companies have a lot of cash on hand, and they are making money. With most companies reporting, operating earnings at companies in the S&P 500 were up 52 percent in the second quarter compared with the second quarter of 2009. Earnings at financial companies more than tripled while profits at materials companies doubled. Energy, consumer discretionary and information technology companies all beat the average. This comes on the heels of a 92 percent year-over-year increase in operating earnings in the first quarter. Corporate profits lead hiring activity. At some point the stalemate will be resolved, and we will see a virtuous cycle of hiring, spending and profits resume.
-Bob Bach, Grubb & Ellis Senior Vice President, Chief Economist
