The U.S. economy is on an expansionary, albeit sluggish, path—not toward a double-dip recession, says BNY Mellon Chief Economist Richard B. Hoey. In the near term, however, hold onto your hats: The “most pronounced weakness in the U.S. economy” will become apparent in the second and third quarters of this year, he says.

Hoey attributes the near-term volatility to the end of the inventory swing from minus $161.8 billion in the second quarter of 2009 to positive $63.2 billion in the second quarter of 2010. Hoey also believes the stress the U.S. economy experienced in the spring was temporary, due to since-unfounded fears of a European financial crisis.

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