Capital Spending: Is Business Running Scared?

A retreat may worsen the slowdown

What a performer. While other sectors of the U.S. economy stagnated last year, Corporate America laid out big bucks for new computers, industrial machinery, and other productivity-enhancing equipment. The splurge provided the economy with its backbone: A stunning 56% of economic growth during the first nine months of 1995 came from higher capital spending (chart).

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