Hurdles Abound Despite Improvements

The stock market is up, unemployment is down.

What could be bad?

But if 2004 was better, on the whole, than 2003, it wasn’t all good.

The recovery got underway but hiring did not. Profits improved but companies did little spending to fuel further economic growth. Workers’ compensation reform was passed, but companies say the promised savings have not generally materialized, at least not yet. Business tax reform passed, but other costs energy, health benefits, construction rose, in some cases precipitously. The mergers and acquisitions market improved but not enough to deploy the cache of pent-up funds at venture capital and equity financing firms. The dollar weakened and the trade deficit ballooned. So did the federal budget deficit.

And through it all, more headaches were piled onto the shoulders of company managers. Public companies struggled to implement the requirements of the Sarbanes-Oxley Act and braced for the added cost of the paid family leave act.

The Walt Disney Co. fought a $200 million shareholder lawsuit amidst a continuing corporate stigma brought on by Enron, Adelphia and others.

There were lapses in the security of online transactions, questions about ethics in managing the Port of Los Angeles and worries over the prospect of rising interest rates.

If the arrival of 2004 was met with great expectations, the end has left many asking, “Is that all there is?”

“We’re really disappointed with the growth in employment,” said Scott Anderson, senior economist at Wells Fargo. “It faded in the summer, and it hasn’t really picked up. I think the story remains pretty good overall, but people don’t feel that growth. They feel it when they see wages and salaries growing, and that’s still very sluggish.”

Many greeted the arrival of 2004 with great expectations, and initially at least, with good reason.

Productivity was soaring and the Valley was on track to add some 11,000 new jobs. An early upswing in the stock market brought a renewed burst of M