Thursday, April 28, 2011
The economy slowed in the 1st quarter
Dropping to 1.8% after achieving a 3.1% rate the previous year. As usual, news reports attributed the drop to all manner of reasons.
When the year first began, economists had been expecting a much more robust growth rate of about 4 percent, only to be barraged by bad report after bad report as the days wore on. Turmoil in the Middle East set off a jump in oil prices. Winter blizzards shuttered businesses and delayed construction, causing investments in nonresidential structures like office buildings to fall by 21.7 percent compared with an increase of 7.6 percent at the end of 2010. Imports, which are subtracted from output, surged, and military spending sank.Trus these reasons all had their effect, but with so many people still out of work, running out of unemployment benefits, foreclosures still rising, there is no demand. Without demand, Wall St. can play with money all they want but the economy just won't grow.
Still, economists expect many of these problems to fade later in the year. Last quarter’s dismal news was, hopefully, “a pause, not a trend,” said Kathy Bostjancic, director for macroeconomic analysis at the Conference Board.
Subscribe to Posts [Atom]
Post a Comment