Back

Searching for a Fiscal Ladder

August 16, 2012

For investors, however, the picture is not that bad. For one thing, while the economy is growing slowly, it seems in little danger of outright recession, as pent-up demand, much improved consumer finances and a nascent recovery in housing should more than offset the drag on exports from the recession in Europe. 
-David Kelly, chief global strategist, JP Morgan

 

As America begins to cool down after a long hot summer, the economy remains sluggish. Economic growth in the first half of the year is estimated to be less than 2%, reflecting continued business and consumer caution, tight lending standards and a shrinking government sector. This pace of growth, in turn, has produced a monthly average of just over 100,000 new jobs since February, leaving the unemployment rate marooned above 8%.

For investors, however, the picture is not that bad. For one thing, while the economy is growing slowly, it seems in little danger of outright recession, as pent-up demand, much improved consumer finances and a nascent recovery in housing should more than offset the drag on exports from the recession in Europe. Corporate profits continue to rise, albeit slowly, with S&P 500 companies achieving record operating earnings in the second quarter; additionally, while equity markets have been volatile, they have, on average, moved higher so far this year.

 

...Read the Full Report