While the broad economy may be expanding, not all areas of the economy move at the same pace. This was true in the previous expansion from 2009-2020. Although it was the longest economic expansion on record, the economy experienced several 'mini-cycles' during its duration. Similarly, while we remain confident the US economy is not in recession, its growth is unbalanced. For example, weak inventories and net exports have muddied the economic landscape the last two quarters, but the consumer remains in good shape. With today being International Traffic Light Day, we found it fitting to highlight the areas in the current cycle that have ground to a halt 'red light,' exhibit caution 'yellow light' and remain robust 'green light.' While this is our current assessment, we continually monitor the different aspects of the economy because, like a traffic light, they can change very quickly.
Red Light | These are areas of the economy that have slowed over recent quarters.
Yellow Light | These areas are still expanding, but caution is warranted.
Green Light | All systems are a go for these areas of the economy!
** Source: Bloomberg.
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