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Corporate downsizing is essentially over




According to the Challenger tally, announced corporate layoffs are almost nonexistent, and have been so for the past several months. This is an indication that corporations have essentially finished their downsizing, and are now lean and mean ready to expand. With no shortage of liquidity in the economy (although smaller firms appear to have much more difficulty accessing credit than larger firms, who find it relatively easy to raise money in the bond market), what appears to be lacking to date is the confidence and the incentive to undertake new ventures and new projects. This is likely to improve now that the elections are past, especially to the extent that a new Congress is able to extend the Bush tax cuts, reduce corporate tax burdens, reduce regulatory burdens, and roll back ObamaCare.

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