How Much Gas is Left in the Economy Tank?

Last Edited by: LPL Research

Last Updated: April 03, 2024

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Jeffrey Roach:

How much gas is left in the tank? Hi, I am Jeffrey Roach, Chief Economist for LPL Financial, and in this edition of the Street View podcast, I'll give you some reasons why there indeed maybe some more gas in the tank, but that doesn't preclude some sputtering in the near term. And I'll share two storylines that are emerging with two charts to back it all up. And the second chart is something I've never shared before. So take note.

Jeffrey Roach:

Last week, investors got an updated view on all the incomes earned in Q4 2023 for what we produced as an economy. And because it takes a bit more time for the government to track payments across the economy, gross domestic income, we call it; it's the blue line. It's not available with the first estimate of GDP. There are two insights from what the data tell us. First, the economy is probably not going to keep posting the same type of growth figures. 2024 is not going to be as strong as 2023. And the best way for investors to get a look at the trajectory of the economy is taking an average between these two measures. But second, some areas of the economy seem to have some upside. We saw a bit of a stagnation in the last year or so of business spending on research and development, but a new law passed in the house and currently in the Senate brings back bonus depreciation and full expensing of R&D costs. And we know these types of incentives have powerful impacts on business behavior. Well, that's all for now, but please continue to follow us on social media for up-to-date analysis on the investment landscape.

Last week, investors got an updated view on all the incomes earned in Q4 2023 for what we produced as an economy. And because it takes a bit more time for the government to track payments across the economy, gross domestic income, we call it; it's the blue line. It's not available with the first estimate of GDP. There are two insights from what the data tell us.

First, the economy is probably not going to keep posting the same type of growth figures. 2024 is not going to be as strong as 2023. And the best way for investors to get a look at the trajectory of the economy is taking an average between these two measures.

But second, some areas of the economy seem to have some upside. We saw a bit of a stagnation in the last year or so of business spending on research and development, but a new law passed in the house and currently in the Senate brings back bonus depreciation and full expensing of R&D costs. And we know these types of incentives have powerful impacts on business behavior. Well, that's all for now, but please continue to follow us on social media for up-to-date analysis on the investment landscape.

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