stall speed

The recent slowdown in the US economy raises the question of whether the growth of output may have dropped below the so-called “stall speed”. This is the growth rate at which a healthy expansion can no longer be maintained, after which the economic engine misfires and the US heads back towards recession. For as long as this risk remains, markets are likely to remain nervous, and will certainly be extremely focused on the minutiae of weekly and monthly activity data. Up to now, the data suggest that the engine of the economy has not stalled, though it is making some ominous spluttering noises.  Read more