U.S. Profits and Capex Have a Better Feel, But Supply-Side Challenges Remain
The second-quarter GDP report alleviates some of our concerns about the squeeze in economy-wide corporate profit margins and suggests that corporate America may be rebalancing. It is good news that despite poor productivity growth trends, a labor market close to full employment, and fairly flat prices, aggregate corporate profit margins appear to have stabilized. The pickup in capital spending is also good news, however, the gain falls well short of the increase we think is necessary to restore productivity growth to a pace that will sustain 3% real GDP growth.
RDQ Economics provides global macroeconomic consulting services with an emphasis on U.S. economic fundamentals and monetary policy.
Our views are driven by consistent application of classical economic and monetary principles and has generated superior anticipation of changes in the stance of monetary policy and of movements in economic growth and inflation.
The founders of RDQ Economics, John Ryding and Conrad DeQuadros, have a combined experience of 26 years on Wall Street, 12 years of experience in central banking at the Federal Reserve and the Bank of England and nine years in the independent research space. John and Conrad have worked closely with fixed income, foreign exchange, and equity traders and portfolio managers, which has enabled their analysis and advice to be tailored to a clientele that is focused on trading and investment decisions.
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