LOS ANGELES – The brutal recession has left many American families, small businesses and state and local governments in financial ruin or teetering on the brink.
But it’s a much different story for the nation’s biggest companies. Many have emerged from the economy’s harrowing downturn loaded with cash, thanks to deep cost-cutting that helped drive the U.S. unemployment rate into double digits.
And although the banking crisis starved countless entrepreneurs for money last year, credit was never in short supply for business titans.
Corporate America’s robust finances have been a boon for the companies’ stock prices: The blue-chip Dow Jones industrial average has risen to 18-month highs.
Some experts say the strength of the largest firms will be a key advantage for the nation in the next phase of the economic recovery.
“The good news for America now is that companies are very competitive, flush with cash and ready to expand,” said Joseph Carson, an economist at money management firm AllianceBernstein in New York.
But others worry that the business giants’ clout has increased significantly at the expense of workers – the millions in the ranks of the jobless as well as those who remain employed but must work harder than ever.
By one prominent measure, major companies had extraordinary success weathering the recession: Industrial companies in the Standard & Poor’s 500 index, a list that includes such giants as 3M Co., Coca-Cola Co. and United Technologies Corp., ended last year with a record $832 billion in cash and short-term securities on their books, up 27 percent from a year earlier.
The U.S. economic recovery could be stunted unless a large share of that corporate wealth flows to average workers, either in the form of new jobs or higher wages, some analysts say.
sponsored Jargon is confusing, by definition. And the financial world has its own set of cryptic words.