Firms deal with consumer-less recovery

A man walks past a sale sign in the window of a store.

TEXT OF STORY

BILL RADKE: So many Americans have suffered in the big slowdown, but big corporations -- they've been doing quite well. It's not that their sales are gangbusters -- they're not. It's because they've laid off workers and otherwise generally cut back on their costs. Well, earnings season starts this week, so we are about to find out how those profits are holding up.

Marketplace's Alisa Roth asks how long can companies keep profiting if consumers can't afford their products?


ALISA ROTH: Americans have finally figured out they need to save money, which is great. Except being too thrifty creates other problems.

Tim Quinlan is an economist at Wells Fargo.

TIM QUINLAN: You're not keeping the economic cycle going and you have a very, very slow recovery and we're already experiencing that here.

Companies have managed to do well since the recession. Mostly because they made themselves more efficient. And they kept those austerity measures in place after the immediate crisis ended. The question is how much longer companies can keep making money without Americans buying more of their products?

Brian Gendreau is a market strategist at Financial Network. He says some companies are learning not to count on us as much as they used to.

BRIAN GENDREAU: Companies really have re-focused a lot of their efforts on serving overseas markets.

Nobody's predicting Americans are suddenly going to start spending again. So for now, the companies that are more likely to keep bringing in profits are the ones with big sales abroad.

In New York, I'm Alisa Roth for Marketplace.

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