San Francisco Fed: Growth in the Post-Bubble Economy

verfasst von Harry Popper, 21.06.2003, 11:36

-->eine für Fed-Leute erstaunlich verhaltene Einschätzung:

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Alternatively, in the aftermath of what many consider to be the greatest speculative bubble in history, it is quite possible that investment is being restrained by fundamental factors that will take longer to overcome. Capacity utilization in the U.S. industrial sector is currently at a 20-year low —only 74.4% as of April 2003. Large amounts of excess capacity combined with technological advances that foster market competition in a global economy have created an environment where many firms lack pricing power. The lack of pricing power restrains the growth of nominal sales—typically an important factor in the determination of a firm's capital expenditure plans. It is worth noting that much of the recent earnings gains of S&P 500 companies have been achieved not through increases in sales but instead through cost-cutting measures.

The likelihood of a robust pickup in sales is ultimately linked to the outlook for household spending. The fact that household spending performed so well during the 2001 recession means that there is less pent-up demand going forward. Hence, the upside potential for household spending growth appears rather limited. On the downside, continued weakness in the labor market and the eventual slowing of the mortgage refinancing boom poses the risk that consumers will rein in their spending. So, to the extent that business capital expenditures are"demand-determined," the projected acceleration in investment may prove to be less vigorous than the consensus forecast expects.

<ul> ~ SF-Fed</ul>

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• San Francisco Fed: Growth in the Post-Bubble Economy - Harry Popper, 21.06.2003, 11:36