Friday, October 14, 2011

Volatile and Sluggish Growth Will Persist

Calculated Risk has a post today that describes the stock market landscape in the light of relevant facts and filtered emotion. His post is based on an article in the WSJ. Here is a link to the post and the conclusion he writes is what follows.

"Although growth is sluggish - due to the significant slack in the system (excess capacity, lack of demand) and also high levels of household debt, I think the volatility this year can be blamed on a series of events including extreme weather (significant snow storms, flooding, hurricane Irene), the oil price increase related to the "Arab Spring", the tsunami in Japan, and the debt ceiling debate in D.C. during late July and early August.

Also the ongoing European financial crisis keeps flaring up and impacting the U.S. economy.

Yes, the economy is very sluggish - 103,000 jobs was a weak report, just better than low expectations - but I think the economic volatility is related to events and hopefully not some new normal."