Business investment might also be positive, but the trend is still very weak.
The manufacturing sector, for instance, has been contracting since the end of summer. Most companies have scaled back hiring. And many firms are still waiting to see how the U.S. trade policy fight with China plays out before proceeding with big investment projects.
“U.S. business Investment has been soft in part due to heightened uncertainty due to the trade war and global growth concerns,” noted chief economist Scott Anderson of Bank of the West.
What companies have not done though is lay off more workers. And that’s been a huge cushion for the U.S. economy.
So long as workers — also known as consumers — keep spending, companies will retain them as employees. And as long as that’s the case, workers confident in their job security will keep spending enough and give businesses no reason to let them go.
Just don’t expect the economy to grow much faster than it already is — about 2% a year.
Although consumers are the main engine of economic growth, businesses have to spend and invest more to push the economy to greater heights. The “business of America is business,” as President Calvin Coolidge once said.
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