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Analysts expect a weak upcoming earnings season, but that may not be such a bad thing, Justin...

Analysts expect a weak upcoming earnings season, but that may not be such a bad thing, Justin Lahart writes: “If a profits slowdown is coming because companies have reached the limit on margin expansion, and now have to hire more workers to keep up with sales, investors should really celebrate what is happening… Earnings growth is nice, but a healthy economy is even nicer.”
Comments (6)
  • Ah!! Is that the velocity of $$ I hear rising?
    30 Mar 2012, 10:52 AM Reply Like
  • Lahart is assuming that unit growth is what is driving sales, a nebulous assumption in an economy growing at 2% with a Fed cranking trillions of fresh dollars into the system. Yes, autos are up and housing is no longer falling, but the engines of unit demand growth are far from strong.
    30 Mar 2012, 11:04 AM Reply Like
  • Profits are down bc business is booming! In all my years I didn't realize there was a day when hiring took place across all industries, large and small. And the trigger for hiring is not as each company's business starts to expand; no, no, the CEO's all wait for earnings season to hire collectively. "We only hire to keep up with sales during earnings season," said CEO Dufus Morony, "bc that's when everyone else does."
    30 Mar 2012, 11:09 AM Reply Like
  • Wherever did politicians and analysts get the idea that hiring is the primary purpose or obligation of business? Profits are the primary purpose, and if earnings build, hiring will follow. The horse still comes in front of the cart in the serious world.
    30 Mar 2012, 11:15 AM Reply Like
  • You are right, businesses are in the business to make money, not to employ people. I work for a company that has a no layoff policy, but will not take on extra business if it is temporary and means hiring someone for a short period of time. Businesses will hire when they are losing sales because of too long of lag times in production.
    30 Mar 2012, 12:44 PM Reply Like
  • So now a weak earnings season is bullish? This market needs a reality check. Lahart is grasping at straws.
    30 Mar 2012, 12:18 PM Reply Like
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