Labour markets reacting to upward slope of capital expenditure line

MFS Investment Management's James Swanson says companies must spend if they want to compete.

It is common to hear the US economic recovery is in terrible shape, with unemployment not falling fast enough and questions over the debt ceiling looming. However, this is contrary to the strength of the current business cycle and also contradicts historic cycles. Capital expenditures are related to the hiring of new workers and this is a driver of the business cycle. The hiring of workers follows the flow of new business spending orders, but with a predictable lag. What is happening with the flow of new spending orders? Big-ticket business spending is on the rise. While thes...