by Kurt Kallaus
Our recent report on The Tale of Two Economies concluded with the need to watch for clues from oil and copper markets as early harbingers of economic change. Capital expenditures for structures and equipment have contracted for 3 straight quarters for the first time since the Great recession of 2007-2009. Exports have not grown in 2 years. Without this normal material support, the US economy’s condign punishment has been increasing reliance upon the consumer to provide “all” the fuel for our modest economic growth lately. Without the negative private capital investment component of the last 3 quarters, we would have seen US GDP average 2% growth each quarter instead of the less than 1% rate we actually witnessed.