Recovery In U.S. Is Lifting Profits, But Not Adding Jobs

Monday, March 04, 2013 09:00
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Recovery In U.S. Is Lifting Profits, But Not Adding Jobs

Tags: Economic Outlook | economy

The U.S. recovery is a strange one, by historical measures. Stock prices are soaring but companies are not hiring, and Federal budget cuts are expected to widen the gap. This analysis is troubling because it seems to explain the unusual character of the slow recovery experienced in recent years in which corporate balance sheets have been strengthened far more than personal balance sheets. 

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"As a percentage of national income, corporate profits stood at 14.2% in the third quarter of 2012, the largest share at any time since 1950," reports Nelson Schwartz, "while the portion of income that went to employees was 61.7%, near its lowest point since 1966." In recent years, the shift has accelerated during the slow recovery that followed the financial crisis and ensuing recession of 2008 and 2009

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