Be Careful of the "New Normal"

Brian S. Wesbury and Robert Stein, economists at First Trust Advisors in Wheaton, III. has published an article on their weekly column for Forbes magazine. They are predicting an average growth rate of 3% in the second half of 2010. A 2.5% annual rate of consumption growth is generally expected in Q3 and Q4. Housing will be neutral in Q3 but add 0.5 points to real GDP growth. Corporate profits and cash on the balance sheet are near record highs. Domestic purchases were very strong in Q2, growing at an almost 5% annual rate. Inventories started growing again this year adding 0.7 points to the growth rate of real GDP.

Click here to read the entire article.


Posted by Yi Song, Associate Editor, Wealth Strategies Journal.