Picking Up the Pace

Lost amidst the market turmoil this week were a number of reports of a strengthening US economy. Consumer confidence soared last month, as did new home sales. Durable goods orders surprised with a 2% jump in July, and personal incomes rose, and are up 4.3% over the past twelve months. 2Q GDP was revised sharply higher, from a 2.3% annual growth rate to 3.7%. This pace is above the 3.2% quarterly average over the past 65 years (see Graph below).

All major components of GDP were revised higher, indicating broad strength in the economy, with business investment particularly strong. In contrast, the European economy crept just 0.4% higher last quarter, while Japan’s actually contracted by 1.6%. China grew at a 7% pace in the second quarter, or so they say.

While there is a lot to worry about in the world, that’s really always true. The risk of a recession in the US is very low, and I just don’t see a collapse in equity prices. Volatility, to be sure, but the US economy is growing and monetary remains accommodative. So we stay the course.

• 10 Dec, 2020

  Not Just A Game

  There are twenty amino acids in the human body. Amino acids are the chemical links that make up proteins. Proteins ...

• 30 Jun, 2015

  Puerto Pobre

  An honest politician may be oxymoronic (or is just moronic?), or maybe it's the black swan that surprises us when seen. ...

• 2 Jan, 2015

  Shipping

  First, happy new year to all!I walked into the office this morning to a crystal clear view of the Pacific. What a ...