It is estimated that American businesses continue to maintain $2 trillion in reserve cash but remain reluctant to use this money to expand operations and hire more workers on fears that another recession is looming. In July, business expenditures as tracked by non-defense capital goods orders, declined 0.2 percent – for August, this category recorded a 1.1 percent increase in spending.
This increase is seen as an indication that businesses feel the likelihood of another recession in the near-term has diminished and it is hoped that should business continue to spend, it could lead to a gain in employment.
The Commerce Department also noted that orders for durable goods slipped by 0.1 percent in August after a 4.1 percent gain in July. The actual result was better than the 0.5 percent decrease expected so even this news is being interpreted as a positive signal.
Source: Reuters
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