Earnings season is well underway and the trend so far has been mostly positive. But as 2011 progresses, companies will be less and less likely to meet - much less surpass - Wall Street's lofty expectations.
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That's because high unemployment, tight credit, an inability to further reduce cost structure and less favorable comparisons to 2010 will conspire to trip up the less nimble corporations.
Indeed, any sustained improvement in spending will depend largely on a significant reduction in the unemployment rate. And even the U.S. Federal Reserve doesn't believe the jobless rate will fall below 8% within the next two years.