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What’s clear is that no matter how hard the government tries to revitalized a down-trodden U.S. economy, it can’t do it alone. Whether it lacks the means or the will (there’s no cure for political dysfunction), Washington has demonstrated that it can only go so far. Finding a solution to the deficit crisis prevents contraction more than it spurs growth. The real engine of growth is the private sector.
Fortunately for U.S. market participants, data from Thomson Reuters shows that firms on the S&P 500 are expecting more capital expenditures in 2013 than analysts originally predicted — more than at any point in the past four years, in fact. Assuming that the sequester doesn’t trip up market confidence, businesses will be looking for productive ways to use some of the $1.7 trillion in liquid assets that they collectively held at the end of the third quarter of 2012.
The real boon will come when higher corporate earnings translates into a material impact on the rate of job creation. As it stands, an average rate of about 180,000 jobs created per month has not been enough to curb the still-high unemployment rate.
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