Bureau of Economic Analysis (BEA) release dates for advanced numbers for US Gross Domestic Product (GDP) are July 27, 2012 for Quarter 2 and October 26, 2012 for Quarter 3 (a few weeks before the November 06 general election).
The rate of growth of personal income and consumption expenditures in the United States has fallen since April 2012 in the second quarter, clearly the former impacting the latter in the presence of sensible risk taking in consumer credit by both consumers and lenders, especially in light of the J P Morgan debacle and since the 2007 housing crisis. It is clear that the wealthy, as income gap widens, are not offsetting GDP loss in consumption arising in the bottom 90 per cent.
US economy has grown by 1.9 per cent in the First Quarter of 2012 and appears to be trending to a slowdown in the Second and Third quarters, personal incomes and outlays being the bellwethers of a second double dip recession by December 2012 according to the definition of recession by the National Bureau of Economic Research.
Troubles in Europe, higher inflation and China and India and associated slowdowns appear to have induced the hiccups in a largely export-led US recovery together with the moral hazard associated with unconditional lending by the Federal Reserve at extraordinarily low rates for an extended period of time through end-2014.
Federal Reserve is best advised to reconsider in its deliberations its bias for a third round of unconditional Quantitative Easing (QE 3) despite any pressures from the $6 billion losses at J P Morgan. The chart below illustrates the pattern since the 2010 recovery.
The occurring retraction of US financial markets from foreign investments given Europe, J P Morgan losses, and economic slowdowns elsewhere will necessitate Q3 from the Federal Reserve of about $250 billion in long term US treasury purchases to create a wealth effect in US domestic stocks and bonds in the short term to prevent another recession before rise in domestic real investment by changing the investment and underwriting portfolios of the Federal Reserve’s primary dealers can create the necessary 250,000 jobs per month.
After all, my sustainable global development firm can be both invested in and underwritten.