Firms have cut back on their capital spending budgets to the point where some of them are not even replacing worn-out equipment. It's been quite a dramatic pullback, and in some sense there's some pent-up demand out there for capital equipment.
Clearly, Corporate America is still in hunker-down mode, reluctant to increase budgets for equipment and slow about increasing employment, ... That puts a weight around the neck of the recovery and keeps it at a moderate pace.