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.
