Wednesday, October 27, 2010

US Companies Have $1 Trillion, But Won’t Spend It

U.S. enterprises are hoarding cash, Moody's reports. Enterprises now collectively hold about $1 trillion in cash, and 20 firms hold about a third of the amount. These include Cisco, Microsoft, Oracle and Apple. Enterprises are hanging onto their cash in case another economic downturn is in the offing, and in part because economic growth is so sluggish at the moment.

The size of those cash hoards also partly explains why job creation has been so sluggish. Smaller companies can't get credit and large companies have cash but won't invest it.

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