By Mark Whitehouse
$1.9 trillion: Corporate America’s cash
U.S. companies’ cash hoard keeps getting bigger, a trend both good and troubling.
After hitting new highs in five of the last six quarters, nonfinancial corporations’ cash and other liquid assets reached $1.9 trillion at the end of 2010, according to the Federal Reserve. That’s 7% of all their assets, the highest level since 1963...
...the persistent growth of companies’ cash hoard suggests a problem: Businesses appear to lack the confidence in the recovery needed to plow the money back into new projects and hiring. In the final quarter of 2010, capital expenditures amounted to $975 billion, or 6.6% of gross domestic product — up from a low of 5.4% in 2009 but still well below the 10-year average of about 8%. Nonfarm employers added a monthly average of 136,000 jobs in the past three months, just a bit more than required to keep the unemployment rate from growing.
Read more:
http://blogs.wsj.com/economics/2011/03/12/number-of-the-week-companies-cash-hoard-grows/
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