The Economy Will Fluctuate

by Lee Adler
Wall Street Examiner

Lest we get too bearish on the US economy in the short run, it pays to remember that even though the Fed has outlawed the business cycle, “the economy will fluctuate.” Contrary to the wisdom of JP Morgan, the stock market may not fluctuate, but the economy will.

Unlike the good old days when economic cycles typically ran roughly 4 years between recessions and grew at an average of 5% over time, today it doesn’t work that way. Today, the economy fluctuates over 3-4 months, almost imperceptibly, and economic growth averages 1.5% or 2%, depending on the time of the month. In the second quarter, GDP growth was reportedly +1.2%, which real time tax collection data had clearly foreshadowed.

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