Wells Fargo Asset Management
Economic and Market Perspective
«Is U.S. economic growth understated?» by James W. Paulsen, Ph.D, Chief Investment Strategist, Wells Capital Management, Inc.
The current economic recovery has been the slowest of the post-war era. Indeed, throughout this recovery, U.S. real GDP has hovered near the “stall speed” of about 2% growth (the Mendoza Line for economic recoveries) constantly fueling fears that another recession was imminent. Chronic consternation surrounding this recovery has produced persistent liquidations from equity mutual funds even though the stock market has mostly risen, has made borrowing money almost taboo, has prevented the emergence of CEO animal spirits who possess considerable capabilities to drive a capital spending cycle but lack the confidence, has pushed fiscal and monetary authorities to respond with the most incredible, unconventional, massive, and ongoing package of economic stimulus ever employed in our history, and finally has produced a highly combative political climate with both sides suggesting the other is responsible.
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by James W. Paulsen, Ph.D
Chief Investment Strategist
Wells Capital Management, Inc.