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Recovery Faltering as Corporate Profits Fall

Here’s some more bad news for the economy: analysts are predicting that corporate profits may fall this quarter for the first time in three years. This comes as a bit of a surprise. Business hasn’t quite been booming, but most of the economic news over the past few weeks has been good—or has at least shown some movement in a positive direction. But as the New York Times reports, the slowdown in Asia combined with the return to recession in Europe has cut demand for new goods, and fewer businesses are expecting things to get better:

Just over half of managers at North American companies now expect production levels to increase in the next 12 months, down from 64 percent in the second quarter, according to a survey by CEB, a member-based advisory firm. In the same survey, the percentage of executives who expect to hire more workers fell to 34 percent from 41 percent last quarter.

“We’re sort of like in this limbo environment,” said Gregory T. Swienton, chief executive of Ryder System, the truck rental and transportation company. “I’d love to be able to say we’re hiring, but there is no natural big growth that would require hiring.”

For a weak recovery like this one, this news is a major setback

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