Tags: Expectations | summer | recovery | dashed

Alhambra's Snider: Expectations for Summer Economic Recovery Will Be Dashed

By    |   Tuesday, 22 July 2014 01:32 PM

While many analysts expect the economy to grow 3 percent or more for the rest of the year, rebounding from the first quarter's 2.9 percent contraction, Jeffrey Snider, chief investment strategist at Alhambra Investment Partners, thinks they have it all wrong.

Since the end of the 2007-09 recession, "the expectations of the Recovery Summer have fallen short with what should be more shocking in terms of regularity," he writes on the firm's web site.

The idea that it was just snowstorms holding the economy back in the first quarter is ludicrous, Snider says.

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Meanwhile, the second quarter was to be "the unquestioned springboard to the guaranteed promised land," Snider writes.

"There must be more than a little bitterness to the growing realization that the second quarter has not been all that much better than the first."

The consumer sector, which accounts for about 70 percent of GDP, remains a problem, Snider says. "We keep hearing the contradiction that consumer spending just won’t take off, despite the 'strongest' payroll growth since 2009," Snider writes.

"It may be finally dawning that such labor improvement is but a mirage, a statistical phantasm of mathematics that are ill-suited to the times."

Nobel laureate economist Paul Krugman is a bit more optimistic than Snider, but he's not exactly doing cartwheels over the economy either.

"Things are getting better, finally. It's starting to look like a real recovery," Krugman told Fareed Zakaria on CNN.

"But it's not a boom. And this is after many, many years of terrible performance. . . . I would say it [the economy] is half-full, half-empty. More half-empty than half-full, because we should be doing much better than this."

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While many analysts expect the economy to grow 3 percent or more for the rest of the year, rebounding from the first quarter's 2.9 percent contraction, Jeffrey Snider, chief investment strategist at Alhambra Investment Partners, thinks they have it all wrong.
Expectations, summer, recovery, dashed
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2014-32-22
Tuesday, 22 July 2014 01:32 PM
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