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May 23 2014

Prospects for Consumer Spending & Business Investment

The consensus remains steadfast in its belief that the U.S. economy will take off this year, achieving annual GDP growth as high as 3% despite first quarter growth coming in a full percentage point below estimates. While Q1 was a major disappointment, Q2 growth estimates near or above 4% are commonplace, based largely on a seemingly strong showing from consumers in the first quarter and a continued anticipation of a surge in business investment.

ECRI has completed a study investigating the prospects for a rebound driven by business investment and consumer spending. As is sometimes the case, our cyclical framework offers a different view.

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