Tuesday, April 23, 2013

The slowdown in economic activity is right on schedule - for the 4th year in a row

The "spring slowdown" is here again. As discussed earlier (see post), the previous three years saw a strong start in the US, followed by a slowdown in economic activity, particularly in manufacturing.



What's especially troubling this year is that we are also seeing a corresponding slowdown in other major economies that were thought to be in good shape, namely Germany ...

Source: Markit

... and China.

China Manufacturing PMI (source: HSBC, Markit)

Treasury yields declined to the lowest level this year in response. This move reflects the bet that given the soft patch in the economy, the Fed will continue buying government paper for some time to come.

Source: Investing.com




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