Last week the U.S. government released numbers showing the economy grew at an annualized rate of 2.4% in the quarter ending June 30, 2010. Compare this to a growth rate of 3.7% in the first three months of 2010 and 5% in the last quarter of 2009.
One can see a slowing of growth as businesses have achieved their desired level of inventory after allowing stocks of goods to decline significantly during the uncertainty of the credit crisis in fall of 2008 and first one-half of 2009. Unemployment continues at high levels and weighs on consumer confidence. Deleveraging by governments and individuals also is expected to hold the consumer back for some time.
Still, the economic recovery continues in the U.S. Stock investors seem to have become at least less pessimistic about the recovery and pushed stock prices up about 7% in July. Things can always change, but those who were exiting stocks in May and June amid worries of a double dip back into recession seem to have missed the recovery story and the stock gains that accompany recovery.
