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The End Of The Recovery, In One Chart

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Published : November 20th, 2015
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FOLLOW : Recovery
Category : Editorials

One of the questions on analysts' minds lately is whether stock prices can keep moving up when corporate sales and profits are falling. But the same can be asked about the overall economy. Why would companies hire more people if they're selling less stuff? The answer is that they probably won't. As the chart below -- put together by good friend Michael Pollaro -- illustrates, business sales and employment have tracked closely since at least the 1990s. When sales have fallen, companies have responded with less hiring and more firing.

But for the past year sales have declined while reported employment has risen. Unless this relationship no longer holds, one of these lines will have to change course very soon. And since sales are beyond anyone's control, it's a safe bet that employment will be the one to give.

24hGold - The End Of The Recov...

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John Rubino is the author of The Coming Collapse of the Dollar (co-written with James Turk), How to Profit From the Coming Real Estate Bust (Rodale, 2003), and Main Street, Not Wall Street (William Morrow, 1998). A former Wall Street financial analyst and columnist with theStreet.com, he currently writes for Fidelity Magazine and CFA Magazine He lives in Moscow, Idaho
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