More signs the economy has stalled

The auto and housing sectors are two major parts of the US economy. They rose rapidly since the end of the Great Recession in 2009. Unfortunately now they seem to have stalled.

The above chart shows auto sales (blue line, left scale) and housing starts (red line, right scale).

The above graphs show auto sales are lower than the levels reached in May 2015. almost a year ago, while housing starts peaked in April 2015.

The bottom line is this evidence confirms the US economy is growing at a pace very close to zero percent. It may very well be the reason the Fed did not force interest rates higher at the latest FOMC meeting.

As we have maintained for a long time (see previous posts), a slow growing economy places downward pressure on commodities, yields, and earnings.

The business cycle is alive and well.

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Thank you for visiting this site.

George Dagnino, PhD
The Peter Dag Portfolio
Since 1977 
Author, Profiting in Bull and Bear Markets

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