An increase in business investment and a pickup in consumer spending may result in positive third quarter results, according to a Bloomberg Businessweek report released on Friday.
Consumer spending rose 3 percent in the first quarter, accounting for 70 percent of the total economy, and the largest increase during that period since 2007, Bloomberg reported.
More consumer spending helped corporate profits show an 8 percent increase, which is the same gain the sector has experienced for the last three months. Business earnings were up 34 percent from the first quarter of 2009, marking the largest year-over-year surge in 16 years, Bloomberg relayed.
According to the report, the massive corporate gains have led many economists to expect more business investments and new hires. With money to spend, companies may look at new capital expenditures, such as computers, energy-efficient lighting and
HDMI projectors, to help them prepare for future expansion.
Recently, surveys on the airline industry and U.S. legal services sector indicated companies were looking to invest in new IT and infrastructure. Businesses and consumers are beginning to feel the dark clouds from the recession part, which may lead to a new wave of economic prosperity.
