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U.S. chief executives more confident, survey shows

 |  NCR Today

Jobs. Jobs. Jobs. The usual hyper-partisan divide argues that President Barack Obama's policies are hurting the economy, keeping corporate profits oversees and impeding job growth. Meanwhile, corporations' continued resistance to hire new employees while not spending massive amounts of cash has created charges of hoarding against major U.S. companies.

The Wall Street Journal had this report titled "Corporate Cash Levels Spike To All Time High, Up 38% Since 1Q09":

"The Federal Reserve today reported corporate cash balances spiked to $1.93 trillion – a 38% increase since the first quarter of 2009 -- representing $530 billion. This significant increase indicates companies are still accumulating cash rather than redeploying it, according to Treasury Strategies, a treasury consulting firm.

"From our work with clients, as well as survey data collected this week, we see that corporations have experienced very strong growth in cash flow from operations. Given that total corporate cash continues to grow, these findings together tell us that corporations are still not comfortable with redeploying their cash," says Cathy Gregg, Partner of Treasury Strategies.

Companies began to accumulate substantial amounts of cash in the first quarter of 2009. This triggered accusations or hoarding. "Today's report demonstrates that corporations are making purposeful decisions to not deploy cash as a precautionary measure to mitigate economic risk," argues Anthony Carfang, Partner of Treasury Strategies."

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If you're a chart person, CNN had this story on cash on corporate balance sheets, along with a few charts.

A recent study by the Wall Street Journal highlighted that "Cash accounted for 7.1% of all company assets, everything from buildings to bonds, the highest level since 1963."

Today, Bloomberg reports that confidence in the economy, sales and labor among CEOs is the highest in almost three years. Now corporations have to start spending cash and hiring new employees.

Confidence among U.S. chief executive officers in the first quarter climbed to the highest level in almost three years, a private survey showed.

The Young Presidents' Organization said today that higher expectations for the economy, sales and labor market helped push up its Global Pulse Index of U.S. sentiment to 65.1, the strongest since the survey began in July 2009, from 62.2 in the prior three months. Readings greater than 50 show the outlook was more positive than negative. The Dallas-based group's gauge of sales in the coming 12 months advanced to 71, the highest since records began, from 67.8 in the previous quarter.

Fifty-six percent of the executives surveyed said the economy would improve in the next six months, up from 51 percent in the prior period. More optimism among businesses may help encourage faster growth in payrolls, which grew in April at the slowest pace in six months.

"Confidence among U.S. CEOs shrank in the second and third quarters of last year in response to a variety of factors, but that has changed over the past two quarters," Stephen Slifer, YPO Global Pulse economic adviser and chief economist at NumberNomics, said in a statement. "GDP is growing again."


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