Why Companies Profits Declined
ENGL 1101
Why Companies Profits Declined
Since the beginning of the last recession United States companies profits have declined drastically. Small local businesses were hurting because of the recession. Record shows “The boom in American corporate profits, which has far outpaced the gains in the broader economy since the end of the last recession, is faltering” (Schwartz). Even companies worldwide whose majorities of its customers were Americans suffered a loss. Europe economy has taken a down turn into a recession while countries like China continue to grow. Some of the factors that caused the recession are automatic tax increases and spending cuts from the United States government. The only way US companies could earn profit was by cutting jobs and reducing their spending budget.
This essay is explaining the reasons why companies profit are decreasing each quarter. American companies are the main one affected by the United States recession but everybody worldwide seems to be hurt by this too. Even “Burberry, the British luxury retailer which had seemed immune to a slowdown, is offering is offering a similar warning” (Schwartz). Congress is trying to help the economy by reducing taxes and offering handouts to keep these companies afloat. The expected decline in profits has yet to set off big layoffs. But it is another factor that is inhibiting hiring and keeping unemployment above. The reason oversea economies are in a slump also is because most of them depend on America economy. Some countries rely on exporting goods to America to fuel their economy, but when Americans do not have the money to buy their products they get hit too.
Whenever United States economy is in a recession it affects everybody in the country and also a majority of countries worldwide. The citizens suffer because, if corporate profits enter a slump, big companies will revise their budgets by cutting jobs and spending less on their operating expenses. Also said “They saw employees
Why Companies Profits Declined
Since the beginning of the last recession United States companies profits have declined drastically. Small local businesses were hurting because of the recession. Record shows “The boom in American corporate profits, which has far outpaced the gains in the broader economy since the end of the last recession, is faltering” (Schwartz). Even companies worldwide whose majorities of its customers were Americans suffered a loss. Europe economy has taken a down turn into a recession while countries like China continue to grow. Some of the factors that caused the recession are automatic tax increases and spending cuts from the United States government. The only way US companies could earn profit was by cutting jobs and reducing their spending budget.
This essay is explaining the reasons why companies profit are decreasing each quarter. American companies are the main one affected by the United States recession but everybody worldwide seems to be hurt by this too. Even “Burberry, the British luxury retailer which had seemed immune to a slowdown, is offering is offering a similar warning” (Schwartz). Congress is trying to help the economy by reducing taxes and offering handouts to keep these companies afloat. The expected decline in profits has yet to set off big layoffs. But it is another factor that is inhibiting hiring and keeping unemployment above. The reason oversea economies are in a slump also is because most of them depend on America economy. Some countries rely on exporting goods to America to fuel their economy, but when Americans do not have the money to buy their products they get hit too.
Whenever United States economy is in a recession it affects everybody in the country and also a majority of countries worldwide. The citizens suffer because, if corporate profits enter a slump, big companies will revise their budgets by cutting jobs and spending less on their operating expenses. Also said “They saw employees
Cited: Schwartz, Nelson. “Earnings in United States Are Beginning to Feel a Pinch.” New York Times. The New York Times Company, 16 Sept. 2012. Web. 18 June 2013. Wallace, William McDonald. The Decline And Fall of The U.S Economy: How Liberals And Conservatives Both Got It Wrong. Santa Barbara, Calif: Praeger, 2010. eBook Collection (EBSCOhost). Web. 19 June 2013.