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IPFS News Link • Business/ Commerce

Here's Why You May Want To Tiptoe Out Before The Party Ends

• davidstockmanscontracorner.com By Lee Adler

If business people believe the economy will grow, they invest more in plant and equipment. If they are not optimistic, they pull in their horns. This week's Commerce Department report on Durable Goods orders contains a nugget or two that help us to see how business people are behaving in that regard.

The picture isn't good. Apparently business people have been growing less confident in the growth potential of the US economy for the past 16 years. That belief, and the reduction in investment that follows from that belief, runs the risk of being a self fulfilling prophecy. This isn't just a long term phenomenon. Business investment in capital goods has been flat since 2011, and has been declining for the past 2 years. Meanwhile, over the 5 years that growth in business capital spending has stalled, stock prices went to the moon. The disconnect matters.


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