Big Companies Pull Back After Rough Quarter
Source: WSJ
After a tough end to 2015, big companies are starting the new year with a tight rein on capital spending, and in some cases layoffs, as they seek to cope with sluggish industrial demand and uncertainties about the continued resilience of the American consumer.
A half-dozen large companies from medical-products giant Johnson & Johnson and tobacco maker Altria Group Inc. to Internet portal Yahoo Inc. have announced plans to cut about 14,000 jobs in recent weeks. Others, including railroad Norfolk Southern Corp. and oil producer Chevron Corp. , are pulling back on their spending plans.
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The cautious approach suggests that executives remain wary as the strong dollar and weak growth in developing markets hurts their foreign sales, and the stock market’s slide and fears of a downbeat economy unsettle investors and consumers at home, despite improvements in housing and employment.
American consumers—the bulwark of the economy—are sending mixed signals: December brought disappointing government figures on consumer spending and retail sales, but companies like Starbucks Corp. , Ford Motor Co. and Nike Inc. continue to log strong domestic sales. Starbucks forecast a weaker first quarter, however, and Ford’s gains were marred by fears that auto sales have plateaued.
Read more: http://www.wsj.com/articles/big-companies-pull-back-after-rough-quarter-1454891324
Reality has finally hit home. Since the 70s our economy moved for a manufacturing based to a service based one. Now seventy percent. Thus, even when people do have extra money they wisely put it aside instead of buying "stuff."
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