The latest incoming monthly data suggest that fourth-quarter GDP growth slowed to between 1.0% and 1.5% annualised. Added to the widening in corporate credit spreads, the renewed weakness in stock markets and the news that the ISM manufacturing index fell further below the 50 mark in December, the downward revisions to GDP estimates triggered yet another round of speculation that the US economy is plummeting into recession. As the massive surge in employment in December illustrated, however, it isn’t.
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