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With capital spending decreasing the companies should have an increased amount of free cash to distribute to their shareholders via dividends and buybacks or to use to retire debt.
Under intense pressure from the EU and international market participants, the government adopted a medium-term austerity program that includes cutting government spending, decreasing tax evasion, overhauling the health-care and pension systems, and reforming the labor and product markets.
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During the recent holiday shopping season, Canada's online spending decreased from the year before, for the second consecutive year.
According to the report, spending decreased on such nondurable items as utilities and groceries.
In a survey for the annual report, corporate and professional meetings planners projected an average 3percentt increase in spending this year over last year, when spending decreased 1percentt over 2002.
But this was more than offset by continued cuts by state and local governments, whose spending decreased 3.8 percent.
The report found that spending decreased in all 12 metropolitan districts included in the report, and businesses that responded to the Fed complained they "had become more pessimistic about the economic outlook".
In another grim sign for the high street, household spending decreased 0.4% in the second quarter, despite falling inflation easing the pressure on consumers.
"Federal Medicaid spending increased 22 percent in 2009, the highest rate of growth since 1991," Ms. Martin said, while "state spending decreased 9.8 percent, the largest decline in the program's history".
The job cuts would be the biggest single-year decrease in the state work force in at least 15 years, the last time the state's year-to-year spending decreased.
However, if due to external reasons the scale of this spending decreases to a certain level, this would have an impact on future fertility rates of families who answered that they are not planning on having any further children.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com