In his recent post on ‘Similar Numbers…Different Stories’ he brings us up to date with a ray of hope. Read the article here.
Two bullet points I pulled out:
• Companies slashed capital spending at a 38% annual rate during the first quarter, with investment in software and equipment down at a 34% annual rate. Business investment in new buildings was down at a 44% annual rate. Weak business investment pulled GDP down 2.6% from the prior quarter
Does that mean there is less demand for business loans from our healthiest businesses?
• Businesses also slashed the level of inventories of goods by $104 billion during the first quarter, the largest quarterly decline on record. This factor alone subtracted 2.8% from first quarter GDP. The sharp reduction of goods “on the shelves and in the storerooms” suggests that manufacturing output will be ramped up faster than previously thought when overall spending by consumers and businesses strengthens
Does that mean when the confidence picks up, business borrowing will pick up faster than we thought?
What do you think?