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Private companies stand apart from stagnant stock market

We often look to the stock market to be able to judge the health of the economy. But there are only around 4,000 publicly traded companies on U.S. exchanged, and there are millions of private companies.

Today, House Republicans are expected to pass what's being called "Plan B". It's aimed at preventing fiscal cliff tax increases on everybody who makes less than a million dollars a year. The President is threatening a veto, holding out for a broader deal.

Throughout all of the back and forth over the fiscal cliff, the stock market has reflected a certain stoicism from corporate America. That is to say, not much movement at all. But the stock market leaves out a huge chunk of our economy: private companies.

There are around 4,000 publicly-traded companies -- those listed on the Dow Jones or the S&P -- on U.S. exchanges, says Marketplace economics correspondent Chris Farrell. Compare that, he says, with 27 million private companies in the country, which run the gamut from large corporations to small corner stores. These companies have decided that it is in their best interests to stay private.

The status of these companies is harder to gauge than those we see listed on the stock exchanges. But Farrell says there are a lot of firms that survey private companies.

So what are these surveys saying?

"Private companies are reporting -- like publicly-traded companies, frankly -- that sales are down," Farrell notes. "Productivity of the employee? Boy, has that been climbing throughout this downturn. These are really stunning numbers."

Ultimately, though, these private companies, on average, are in the same level of stasis as public companies: "They'd like to hire more, but they'd like to see...what happens in 2013," says Farrell.

About the author

Chris Farrell is the economics editor of Marketplace Money.

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