U.S. companies are in recovery mode

Posted: April 11, 2012

If the campaign rhetoric that has dominated the Republican primaries is any indication, Americans can expect the fall presidential campaign to focus on the economic condition of the country. If you believe recovery from the recession is real, you might be more inclined to favor the incumbent. If not, you may vote for change.

That's a good debate to have, but it's a difficult one because most people will want to use their personal brush to paint the nation's picture, even though their own circumstances may not be generally applicable. Someone who has been unable to find a job for months won't think there has been much of a recovery.

The party traditionally considered more business-friendly has been relentless in its portrayal of the country as still being in dire straits. Interestingly, though, there's evidence that U.S. companies, especially large ones, are doing as well or better than they were before the recession.

An analysis of corporate financial reports by the Wall Street Journal found that cumulative sales, profits, and employment last year among members of Standard & Poor's index of 500 stocks were higher than they were in 2007, before the recession.

Of course, one reason many of those companies are doing better is that they shed employees - that is, they shed American employees. Large companies have actually added 1.1 million jobs since 2007, but many of those positions are overseas. That will be a talking point in the fall campaign, too.

"U.S. companies became leaner, meaner, and hungrier," former Wells Fargo economist Sung Won Sohn told the Journal. In 2007, the S&P 500 companies averaged $378,000 in revenue for every employee on their payrolls. Last year, that figure grew to $420,000.

Many Americans have yet to recover from the recession, but that doesn't mean the recovery isn't real.

|
|
|
|
|