WASHINGTON – U.S. businesses are sitting on the biggest pile of cash in perhaps 40 years, suggesting an ongoing caution in hiring and investment spending, an economist from the New York Federal Reserve said on Thursday.
Erica Groshen told a conference sponsored by the Cato Institute that nonfinancial corporations, who usually are borrowing to fund new investments, have become net savers.
“They’re sitting on a pile of money and they’re not investing it,” she said, referring to the unusually weak pace of hiring and somewhat subdued capital spending. “This is unusual. You have to go back 28 or maybe 40 years to see a period of time like this.”
“It suggests, certainly, continued caution in hiring and investment,” Groshen added.
For this complete story, please visit U.S. Firms Reluctant to Tap Cash Pile – Fed Economist.
