Bloomberg notes in a recent story that companies are accelerating equipment purchases to boost productivity, reinforcing an unprecedented gap between capital spending and employment in the U.S.
Based on a “Man vs. Machine” report from Bank of America Merrill Lynch, Bloomberg said corporate investment will rise 11% this year as sales pick up, following a 15% gain in 2010. Employment will grow just 1.7%, after a 0.7% increase last year.
Quoting Neil Dutta, the Bank of America economist who wrote the report, “Machines have the upper hand” Dutta said in an interview. “You see this huge pickup in capital spending, but there isn’t a meaningful increase in employment; it being grudgingly pulled along. The consumer is not going to perform the way people expect”, Bloomberg said.
To read the full text of the Bloomberg story:
click here.
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