The global economic slowdown appears to be having a more marked impact on the US economy, with exports falling sharply in July and manufacturing output dropping in August. The survey evidence now points to a continued decline in real exports. The end-year fiscal cliff deadline is also now only a little more than three months away. We would expect the issue to garner a lot of media attention once the Presidential election in early November has passed. Once households and businesses grasp the full extent of the potential increase in tax rates, we would expect to see the fiscal cliff have a much more pronounced impact on spending and investment in the final couple of months of this year.
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