“$MS just published its November read on its proprietary Business Conditions Index, and it dropped 6 points to 35%. This follows last month’s stunning 14 point plunge.
“Rising fiscal policy uncertainty is having an increasingly negative impact on business activity as the fiscal cliff looms, write the economists led by Vincent Reinhart. “After the status quo election results, the ideological divide that blew up the “Grand Bargain” in 2011 still exists. Risks are significant that a fiscal cliff deal won’t be reached by January 1, potentially a major blow to an economy that appears to be moving into year end with little momentum.”
This only reinforces the idea the U.S. consumers and the U.S. businesses are experiencing the economy very differently. Specifically, the consumer has been feeling more confident thanks to emerging bullish trends like the rebound in home prices. Meanwhile, businesses are becoming increasingly cautious as the fiscal cliff looms.
