More evidence is emerging that the US economic activity has slowed recently. In addition to the manufacturing output decline (see Twitter chart) and slower home sales (chart), the latest private payrolls number from ADP now shows a decline in job creation.
The US is now on track to reach only 1.6% real GDP growth for 2013 - in spite of the extraordinary amount of central bank stimulus. The sad part about this weakness is that to some extent it has been self-inflicted. Policy uncertainty, including "taper"-related fears and the recent dysfunction in Washington have continued to impede growth in the United States.
The chart below shows the Conference Board's consumer confidence index. Consumer expectations, which tend to influence larger expenditures and investment, have been particularly vulnerable to "internally generated" shocks. Corporate spending and hiring is not far behind the consumer.
|Source: Barclays Research|
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