Quantcast
Connect with us

Amidst record unemployment, US companies hoard $1 trillion of cash

Published

on

NEW YORK (Reuters) – U.S. companies are hoarding almost $1 trillion in cash but are unlikely to spend on expanding their business and hiring new employees due to continuing uncertainty about the strength of the economy, Moody’s Investors Service said on Tuesday.

As the economy stabilizes companies are also more likely to spend on share repurchases and mergers and acquisitions, Moody’s added.

ADVERTISEMENT

Companies cut costs, reduced investment in plants and equipment and downsized operations in order to boost cash holdings during the recession. As the corporate bond market reopened many companies also boosted cash levels by selling debt and refinancing near-term debt maturities.

The US unemployment rate, meanwhile, sits at a whopping 9.2 percent. (A graph of the unemployment rates state by state can be found here).

Nonfinancial U.S. companies are sitting on $943 billion of cash and short-term investments, as of mid-year 2010, compared with $775 billion at the end of 2008, Moody’s said. This would be enough to cover a year’s worth of capital spending and dividends and still have $121 billion left over, it said.

However, “we believe companies are looking for greater certainty about the economy and signs of a permanent increase in sales before they let go of their cash hoards, which they suffered so much to build,” Moody’s said in a report.

ADVERTISEMENT

“Given low demand and capacity utilization within certain industries, companies are wary of investing their cash in new capacity and adding workers, thereby doing little to abbreviate the jobless recovery,” it added.

Around one quarter of the cash is held overseas and is unlikely to be repatriated to the United States, Moody’s said.

ADVERTISEMENT

Meanwhile only 20 companies hold a large portion of corporate cash balances, with $346 billion on their balance sheets, or 37 percent of the total, Moody’s said.

Cisco Systems has the largest cash balance, at $39.86 billion, while Microsoft is second with $36.79 billion, Moody’s said. Google has the third-largest balance with $30.06 billion, followed by Oracle with $23.64 billion and Ford Motor Co at $21.89 billion.

Technology companies held the most cash as a sector, at $207 billion, followed by pharmaceuticals with $124 billion, energy at $105 billion, and consumer products with $101 billion, Moody’s said.

ADVERTISEMENT

(Reporting by Karen Brettell; Editing by James Dalgleish)

Enjoy this piece?

… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and legal efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. And unlike other news outlets, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from billionaires and corporate overlords, we fight to ensure no one is forgotten.

We need your support to keep producing quality journalism and deepen our investigative reporting. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us in the future. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you. Click to donate by check.

Enjoy this piece?

… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

We need your support to keep producing quality journalism and deepen our investigative reporting. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us in the future. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you.



Report typos and corrections to: [email protected]. Send news tips to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

CNN

Trump-loving “hate group” leader struggles to defend chauvinism during CNN interview on Portland chaos

Published

on

Portland, Oregon on Saturday was the scene of another far-right mobilization by groups such as the Proud Boys and Patriot Prayer.

CNN's Sara Sidner interviewed Enrique Tarrio, who succeeded Gavin McInnes as the chairman of the Proud Boys. The group is listed as a hate group by the Southern Poverty Law Center.

Tarrio had traveled from Miami to take part in the far-right rally in Portland and appeared to be wearing body armor.

Continue Reading

Breaking Banner

‘Go back to Harlem!’: Florida woman has n-word laced meltdown after bumping black woman’s shopping cart

Published

on

On Saturday, the Atlanta Black Star reported an incident in Florida, in which a white woman screamed racial slurs at a black woman at a Publix supermarket in Miami after their shopping carts jostled each other.

After the woman allegedly banged into Nicki Johnson's cart, she refused to apologize, saying, "I didn't hit you with my cart, and f**k you,  you f**king n****r."

Johnson whipped out her cell phone camera, and began recording the incident, saying "You, why don't you call me a n****r again?"

"You thinking I'm sorry?" snapped the woman. "Let me tell you something, I don't have to call you anything. Get away from me, I will call security and there are surveillance videos. Get away from me!"

Continue Reading
 

Breaking Banner

‘I’m a nurse, what are you?’: Tennessee lawmaker humiliates anti-choice activists in brutal public grilling

Published

on

Anti-choice activists in Tennessee were unprepared for the grilling they got from a Democratic Party lawmaker when making the case for a bill that would outlaw abortion before many women knew they were pregnant.

One of the speakers in favor of the fetal heartbeat bill was Baptist Pastor Randy Davis, who was questioned by state Sen. Katrina Robinson (D-Memphis).

"How many women executive pastors do you have in your convention?" Robinson asked Davis. "Or senior pastors."

"None," Davis replied.

"So is it the same ideology that restricts access to women being able to lead a congregation that leads you all to support women not being able to make a medical decision about their body?" Robinson asked.

Continue Reading
 
 

Thank you for whitelisting Raw Story!

As a special thank you, from now until August 31st, we're offering you a discounted rate of $5.99/month to subscribe and get ad-free access. We're honored to have you as a reader. Thank you. :) —Elias, Membership Coordinator
LEARN MORE
close-link
close-image