Will Rapid Productivity Growth Lead to Profitable Expansion?
With all the doom and gloom in the markets today (SP500 dropped 3.1%), it's easy to think that the global economic recovery is about to turn into a double dip recession. After all the jobless claims came in higher then expected at 480K and surely that means growth has stalled? Possibly but Brian Westbury - Chief Economist at First Trust - has a different twist on the numbers reported today. Specifically that the productivity numbers are not only making companies more profitable but those profits are going to lead to expansion and more hours worked. Clearly the job creation spiget hasn't been turned on yet, but we're on the tip of the iceberg as corporate profits are soaring. Job growth likely depends on whether the government will get out of the way or instead force the US to crash into the iceberg. Last night Cisco (CSCO) talked about boom times ahead with record profits and the hiring of 2-3K employees in the next few quarters. The market wants to move a head and it cle...