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Worrisome Signs Series: Decline in private investments points to looming recessionary possibilities

After reaching $2.77 trillion in the first quarter of 2006, the real gross private domestic investments started declining and by the time U.S. economy entered recession it was down to $2.5 trillion and after which it declined sharply to just 1.8 trillion in the third quarter of 2009. Since then economic and monetary policies have given it a boost. In the third quarter of 2015, it reached a fresh all-time high of $2.88 trillion and again it is in decline. By the second quarter of 2016, it is down to $2.77 trillion.

In the second quarter of 2016, the measure is down 3.42 percent from a year ago. Since 1948, there have been 16 instances, when this measure has declined into the negative on a yearly basis and in 13 cases recession followed within a span of one to two years. It is one of the many measures which have been warning against looming recession in the United States.

 

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