Capital Markets: Observations and Insights
Younger than It Looks
ECONOMY
Cyclical Spending Signals More Expansion
• 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
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Source: U.S. Bureau of Economic Analysis.
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