SocGen: Everyone's Worried About The Economy Slowing Down Again - But This Time Will Be Different
In the U.S., the big question is whether the economy is flagging again (whether there's a "spring swoon" to use the popular parlance).
If the economy were to fade again, it would mean that this was just the latest in a series of false-dawns since the crisis, where we thought that we'd finally broken out of the malaise, only to return to sub-trend growth.
SocGen's Michala Marcussen argues that this time, the recovery won't stall out.
She writes:
Recent softness in the data has sparked concerns that the US economy, in a replay of previous years, is about to stage a return to stall-speed growth. In our opinion, however, this time will be different as the foundations for a sustainable recovery are now in place, with much of the private sector deleveraging completed and credit channels largely repaired. The one remaining headwind is fiscal consolidation, but heading into H2, we should see the positives of (1) housing recovery, (2) fading policy uncertainty and (3) the positive supply side shock from shale gas drive a path to 3% growth.
Hopefully this is true.
The recent tumble in commodities has caused people to start seeing the world economy in a dim light once again.
And even to Marcussen's first point, the housing recovery, there's some evidence that things are flagging a bit.