U.S. companies are holding much less cash than thought — about $500 billion less, according to Federal Reserve data.

Cash and liquid assets are still king

At of the end of March, nonfinancial corporations reported $1.74 trillion in liquid assets on their balance sheets, up from $1.72 trillion at the end of last year.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

Revisions, however, show those stockpiles weren't as big as once thought last December.

"Perhaps more significant than the number itself, however, is how the revision affects the trend. Before the revision, the Fed showed corporations continuing to accumulate cash, with liquid assets rising nearly every quarter since the recession ended and reaching a record $2.2 trillion at the end of last year," the Journal reports.

"Now, however, it appears corporate cash piles grew rapidly through 2009, then leveled off. Companies aren’t spending their cash, but they aren’t holding more of it, either," the Journal adds.

Corporations have endured criticism that they're stocking up on cash instead of investing and hiring, which is what the economy needs, though business leaders say demand just isn't there.

Separate government data may indicate that business leaders are correct.

Commerce Department data shows that personal incomes grew 0.2 percent in April from the previous March, while consumer spending rose 0.3 percent.

Experts say the numbers show that consumers remain cautious over the fate of the economy and are dipping into savings to get by.

"As consumer spending has outpaced income gains for several months and by a wide margin, the savings rate dropped significantly," says economist Harm Bandholz at Unicredit, according to the AFP newswire.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.