A significant economic indicator that I’ve selected is Corporate profits. Corporate profits are “a component of the government measure of national income; the net revenues received by incorporated businesses before corporate income taxes are subtracted.”
Corporate penalties obtained by the SEC have increased over the years. This shows that some corporations are discouraging job growth. This has results in a decline in the stock market performance which deters investors.
Eliot Spitzer, Attorney General of New York has targeted some of these corruptions in Corporations. He has been said to have potential as an employee for the White House an could bring about positive change to the Nations Economy.
A specific corporation that reflects the economy is General Motors. Gm is selling more cars to China than it is to the U.S. Suv’s and CUV’s are doing very well with their sells to China. This offers jobs to Americans to process and make more vehicles. A Subcategory of Corporate Profits is the Corporations inventions. If Gm had created a sufficient battery for motor vehicles, it would be a “turn of the century invention”. There would be a boost in consumer spending and investment. This would encourage job growth to make the batteries and vehicles. The invention has not happened yet, but if it did there would be a boost in the Economy like that of the computer. The reason for this is because such an invention would make a Corporation prosperous. It would out-due its competitors and other companies would be bought out.
In 1960, GM manufactured nearly 60% of the cars sold in America. Presently corporations have to “pay high healthcare and manufacturing cost, expensive union contracts,excessive capacity, poor quality and lackluster design. “Public image has gone bad for some companies”, and that is a sign of a poor corporation which hints a poor economy. “Analyst have speculated bankruptcy within some corporations”
Public endorsements are also beneficial. Investors Warren Buffett and David Einhorn “purchased 10 million shares of Gm”. They are currently ahead of the European Company Ford. When you compare the two Corporations you see why the U.S economy is doing better than the European.”There are profits in North America”. “Next GM will be introducing its next generation Chevrolet Silverado and GMC Sierra Pick ups. This shows good competition for select Nations who constantly upgrade their technology; which means they are ahead of others.
When executives in Corporations retire they have negative impact on Corporation privfits like Mark Fields, retiree of Ford. This has resulted in a massive decline in Fords profit.
Sources
http://www.forbes.com/sites/joannmuller/2012/10/10/why-ford-is-lagging-gm-on-wall-street/
http://www.moneycrashers.com/leading-lagging-economic-indicators/
http://www.theatlantic.com/magazine/archive/2008/07/electro-shock-therapy/306871/
http://www.cnbc.com/id/100870316
http://www.forbes.com/sites/michaelbobelian/2012/04/11/the-secs-latest-revolution/