Shift to Capital Goods

According to the Dept. of Comm. since the recovery began business spending on employees has increased 2%, while spending on equipment and software (E&S) has risen 26%. A spending rebound that divergent has only occurred once–after the ’82 recession. This is happening because E&S prices are down 2.4% since the recovery began while labor costs are, due to rising healthcare costs, up 6.7%.

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