Investments to Strengthen US Economy in 2010



Corporate investments will contribute to stronger growth in the US and the economy will start to add jobs early this year, a survey of business economists showed. 



Bloomberg reported that spending on equipment and software by companies is expected to increase 7.2 per cent this year, up from the November survey’s projection for a 4.2 percent gain. Median estimate of 48 economists surveyed by the National Association for Business Economics, showed that purchases will rise even more next year, jumping 8.6 per cent. 



Corporate spending will help drive economic growth of 3.1 per cent this year and 3.2 per cent in 2011, economists said. That will help make up for weakness in consumer spending, which accounts for about 70 per cent of the economy, as the nation pulls out of the worst recession since the 1930s.  “Business investment is growing faster than the rest of the economy,” said Richard Dekaser, Chief Economist at Woodley Park Research in Washington, who helped conduct an analysis of the NABE survey.



“We find inventories to be quite lean now, so businesses are going to be restocking throughout the course of this year and next,” he said. Payroll increases will average 50,000 a month from January through March. Economists in the survey also said stock prices will increase through 2011.



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