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Lowest Business Investment since the recession

Marketwatch is reporting dismal numbers related to economic growth in the first three months of 2016; expansion is “the slowest pace in two years as business slashed investment by the steepest amount since the Great Recession.”

GDP growth was significantly reduced as well — recording a .5% annual growth rate. The prior three quarters were 1.4%, 2% and 3.9% in the preceeding year, per quarter.

Marketwatch suggests that some economists contend this sluggishness is an anomaly and will bounce back this spring, estimating a 200,000 job growth for April numbers, which will be released on the first Friday in May. Those with this sentiment predict that “the economy will speed up to a 2.6% annual clip in the spring, typically the fastest growing quarter of the year. The same pattern occurred in both 2015 and 2014.”

On the other hand, I tend to side with economists who are a little bit leery about a robust-growth outlook. “A tepid global economic scene and a tumultuous U.S. presidential election marked by heavy anti-corporate rhetoric appears to have made business executives more cautious.”

Business investment is certainly anemic, and we’ve recently crossed the threshold of more businesses closing than opening. None of this is a sign of a healthy economy, and I doubt very much that the April numbers will be so rosy.