Capital Markets: Observations & Insights
Cyclical Spending Signals More Expansion Birthday Wishes
• The cyclical components of GDP – business investment, residential investment, and consumer durables – have historically risen much higher prior to economic peaks
• The implication is that the economic expansion has room to expand
Cyclical Components % of GDP
Low cyclical spending may indicate room for expansion
30%
28%
26%
Average
24% % of GDP
22%
20%
1970
1971
1973
1975
1976
1978
1980
1981
1983
1985
1986
1988
1990
1991
1993
1995
1996
1998
2000
2001
2003
2005
2006
2008
2010
2011
2013
2015
2016
2018
Source: U.S. Bureau of Economic Analysis.
Page 4
Made with FlippingBook - Online catalogs