Economy

Why U.S. Corporations Remain Optimistic Amid So Much Uncertainty

Trade disputes and other features of rising global uncertainty aren’t enough to deter U.S. corporations from remaining optimistic, according to the New York Times.

Reports this week highlighted the National Federation of Independent Business’s (NFIB) latest optimism index, which recently reached new highs. The NFIB’s president, Juanita Duggan, described the index’s reading as “astounding.” Meanwhile, nearly 90 percent of firms in the Standard & Poor’s 500-stock index have surpassed earnings expectations.

“Animal spirits are high,” said PwC chairman Tim Ryan in an interview with the publication. Reports cited data that reflected accelerated growth and record-low jobless stats. Analysts are also pointing to anecdotal evidence of corporate optimism in the country.

Ryan told reporters that business leaders now feel confident that they are viewed as part of economic growth and strength, whereas in the past they had been vilified as “greedy exploiters,” the NYT said.

“They feel good about themselves, like they are the good guys,” said Ryan.“They are sitting up a little straighter in the chair.”

The confidence among U.S. business leaders — including small businesses — is remarkable, considering widespread uncertainty linked to ongoing trade disputes, rising credit card debt and the nation’s annual federal deficit, which is approaching $1 trillion, reports said.

However, optimism isn’t equally felt across industries. Reports said companies in the auto-making, manufacturing and certain farming industries are showing concern over rising costs of raw materials, as well as supply chain issues, slowing export sales and logistical issues. The White House’s corporate tax cuts, however, are boosting earnings and bumping up ROIs.

The NYT said after-tax profits make up 9.6 percent of total domestic output, a figure that is about 50 percent above historical averages. “Red tape” restrictions pertaining to safety, finances and the environment are being eased, and foreign investment in the U.S. remains strong.

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