Sunday, August 1, 2010

What Inventory Can't Provide

To bring unemployment down,we need growth closer to 3%,in the view of economist Mark Zandi,co-founder of Moody's Analytics.U.S. growth was only 2.4% in Q2.A lot of the growth we had was due to inventory rebuilding.It's not engaging in a self-sustaining economic expansion.With many headwinds to hinder growth,there's reason to be nervous.
The rate of manufacturing growth is starting to slow.They can't continue to count on inventory-related gain.
The Institute for Supply Management's Manufacturing Survey released this morning was at 55.5 for July,a decline from June's reading of 56.2.A reading over 50 indicates growth.
Mr.Zandi said he was surprised by Europe's performance and how well the governments have executed austerity plans.Euro-zone inflation is at 1.7%,a 20-month high.Inflation is considered to be one of the markers of economic growth.
Moody's Corporation(MOC)

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