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The U.S. Economy Expanded: Horizon Explains What This May Mean Small Business Own

The U.S. economy expanded from December 2011 to mid-January 2012. What does this mean for small business owners? For job seekers? Read on to find out the possible implications of the expanding economy.

By: Kelli M. Horne
Category: Business:Management
Posted: Jan 31, 2012
Updated: Jan 31, 2012
Views: 25


The New York Times is reporting that in the 4th quarter the U.S. economy expanded by 2.8 percent according in information compiled by the Commerce Department. During the 3rd quarter the economy expanded by a much lower 1.8 percent. The increase is encouraging for business owners and is a very different outlook than those from summer of 2010, when economist feared the American economy might be entering a new phase of the recession at this time.

The growth rate is still lower than the U.S. economic growth rate from past decade; however, economist attribute some of the negative pull on the economy to decreased national defense spending. Other government agencies have cut spending during the economic downturn of reason years and those cuts still impact the growth statistics. Federal, state and local governments may have decreased spending by as much as 12.5 percent over a period of years and further cuts may go into effect in 2012.

Contributing to the growth in the economy is orders of durable goods and manufacturing business. Many U.S. companies are reporting strong profits and new orders. General Electric and Lockheed Martin are reporting record order backlogs. This upturn in manufacturing orders and business, according to some economists, may allow the U.S. economy to weather the European debt crisis well.

Still, what does both the good and bad news mean for individuals and small businesses? While the economy seems to be growing a modest rate companies still seem reluctant to use their burgeoning profits to invest in new workers. According to Conrad DeQuadros, senior economist at RDQ Economics, "Businesses have been holding much higher levels of cash than they have in the past."

Small business owners are encouraged to invest in workers. Today's economy produces more than it did when the recession began in 2007, yet it does so with 6 million fewer workers. The growth in the economy needs to translate into jobs, homes and security for American workers and families. Failure to invest in workers broadens income disparity and ultimately leaves the U.S. open for economic insecurity.

But managing income and reinvesting so that the dollars are available to grow staff can be complex and temporarily make funds unavailable for business expenses. If you need help navigating through the complex economic picture faced by most Americans and American businesses today, Horizon Business Solutions can help. Call 614-577-1700 or check out our website at www.horizonbiz.com today to find out what you can do to make your business profitable and cost effective.

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