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The meager 1.6% GDP growth in 2013 is partially self-inflicted – Sober Look

This is a syndicated repost published with the permission of Sober Look. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

More evidence is emerging that the US economic activity has slowed recently. In addition to the manufacturing output decline (see Twitter chart) and slower home sales (chart), the latest private payrolls number from ADP now shows a decline in job creation.

Source: ADP

The US is now on track to reach only 1.6% real GDP growth for 2013 – in spite of the extraordinary amount of central bank stimulus. The sad part about this weakness is that to some extent it has been self-inflicted. Policy uncertainty, including “taper”-related fears and the recent dysfunction in Washington have continued to impede growth in the United States.

The chart below shows the Conference Board’s consumer confidence index. Consumer expectations, which tend to influence larger expenditures and investment, have been particularly vulnerable to “internally generated” shocks. Corporate spending and hiring is not far behind the consumer.

Source: Barclays Research

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