American CFO Survey Finds Hiring will Remain Low on Weak Consumer Spending

A survey by Duke University/CFO Magazine of chief financial officers found while they will increase investment in equipment throughout the year, that won't have a positive effect upon hiring, as consumers continue to hold back on spending.

While this is unfortunately already being attempted to be spun as another sign we're in a recovery, as far as the spending on equipment goes, as data from the last quarter revealed, all of that has largely been replenishment spending, and it seems that's what this is referring to as well, or the additional comments on no plans to hire wouldn't have been included.

Think of it. You don't buy equipment and then add you aren't going to hire if the acquisition of that equipment is based upon consumer demand. So this is a somewhat flawed study in the sense of how some people are spinning and interpreting it, when it's obvious this continues to be a period of replenishment and not growth.

This is evidenced by the nonsensical conclusion of the director of the survey, John Graham, who is a finance professor at Duke University’s Fuqua School of Business.

“The uptick in business spending indicates the economy has bottomed out,” said Graham. “But, the recovery might be short-lived if the employment picture does not begin to improve.”

What an incredibly ignorant statement. He's covering his rear-end by making the assertion the economy has bottomed out, and then adding it could be a short-term bottoming out if the employment situation doesn't improve.

Either the economy has bottomed out or not. Have the guts to make the call and live with the consequences if you're wrong. This takes a lot of legitimacy out of the survey by the comments of Graham, who obviously isn't sure at all about the economy bottoming out, or he wouldn't have said what he said.

Even though the CFOs of the company said they're looking at a general increase of capital spending in 2010, and that will be the highest in seven years, simply confirms they've held back on replenishing equipment for a long time and finally have to spend in order to provide the equipment they need to do business.

The bottom line to me is we're continuing on in the recession, and no data like this does anything to change that reality, as the professor obviously knows too well.

The recession continues on no matter how data is spun.