CHART OF THE DAY: The Historic Decline In The US Capital Stock Is A Bad Sign For The Economy

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The U.S. economy has never seen weaker growth in its capital stock – the investment in software and equipment that businesses use to expand and generate returns less the depreciation of existing equipment.

That doesn’t bode well for the future growth of the U.S. economy.

UBS economist Drew Matus told Bloomberg TV today that “we don’t know what the repercussions are because we have nothing in history to look back on and say, ‘Hey, last time it did this, this is what followed on it.’ I would submit to you, though, that it’s probably nothing good.”

Fellow UBS economist Sam Coffin told Business Insider that yesterday’s latest GDP numbers – specifically the investment spending portion – are growing “a good deal slower than last year, and probably doesn’t keep up with depreciation. So, we’re looking so far at a probable decline again in the capital stock in 2012, or at least very slow growth, if there is any.”

FOR MORE – UBS: Everyone Is Ignoring A Sign Of US Economic Decline We Haven’t Seen In 60 Years >

chart of the day, the historic decline in the us capital stock, august 2012

Photo: BEA

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