There’s an old joke that economists predicted nine out the last five recessions. It has a basis in fact, and the point of the joke is that even ‘the experts’ cannot tell what will happen in our near term economy, even if hindsight makes it look as though a correct prediction would have been easy. I am, therefore, not going to try to look into a crystal ball. I’m not predicting a recession, nor a continued (anemic) expansion (although if I had to bet, I’d say this was a one off quarterly contraction and we’re not due for a recession now).
However, while a lot of politicians and media are trying to blame the contraction on horrible weather as the main driver of the 2.9% annualized drop, but the fact is that the economy is still weak. Domestic stock Markets are doing well for other reasons than a vibrant economy and are not much of an indicator. There are still too many headwinds holding us back from having a much overdue robust recovery. Some are out of our control, but most have to do with an over burdensome corporate and individual tax structure and large regulatory growth over the past several years. When we deal with these problems, perhaps we can get back to real growth.
