The News Courier in Athens, Alabama

Business

July 27, 2012

Few think sluggish US economy will strengthen soon



WASHINGTON (AP) — A U.S. economy that plodded along in the first three months of the year likely grew even less in the April-June quarter. And most economists no longer think growth will strengthen much in the second half of 2012.

Weaker hiring, nervous consumers, sluggish manufacturing and the overhang of Europe's debt crisis might be pointing toward everyone's big fear: another recession.

Against that background, the government on Friday will issue its first of three estimates of how much the U.S. economy expanded last quarter. The consensus forecast is that growth slowed to an annual rate of 1.5 percent, according to a survey of economists by data firm FactSet. The Commerce Department will issue the estimate at 8:30 a.m. EDT.

A quarterly growth rate of 1.5 percent would be the weakest in a year. It would follow a meager 1.9 percent rate in the first three months of 2012.

Much more growth would be needed to fuel stronger hiring. Economists generally say even 2 percent annual growth would add only about 90,000 jobs a month. That's too few to drive down the unemployment rate, which is stuck at 8.2 percent.

The U.S. economy has never been so sluggish this long into a recovery. The Great Recession officially ended in June 2009.

Until a few weeks ago, many economists had been predicting that growth would accelerate in the final six months of the year. They pointed to gains in manufacturing, home and auto sales and lower gas prices.

But threats to the U.S. economy have left consumers — who account for about 70 percent of the economy — too anxious to spend freely. Jobs are tight. Pay isn't keeping up with inflation. Retail sales fell in June for a third straight month. Manufacturing has weakened in most areas of the country.

Fear is also growing that the economy will fall off a "fiscal cliff" at year's end. That's when tax increases and deep spending cuts will take effect unless Congress reaches a budget agreement.

Text Only
Business
Photos


Poll

Do you believe America will ever make another manned flight to the moon or another planet?

Yes
No
     View Results
Facebook
AP Video
Crash Kills Teen Pilot Seeking World Record LeBron James Sends Apology Treat to Neighbors Raw: Funeral for Man Who Died in NYPD Custody Migrants Back in Honduras After US Deports Israeli American Reservist Torn Over Return Raw: ISS Cargo Ship Launches in Kazakhstan Six Indicted in StubHub Hacking Scheme Former NTSB Official: FAA Ban 'prudent' EPA Gets Hip With Kardashian Tweet Bodies of MH17 Victims Arrive in the Netherlands Biden Decries Voting Restrictions in NAACP Talk Broncos Owner Steps Down Due to Alzheimer's US, UN Push Shuttle Diplomacy in Mideast Trump: DC Hotel Will Be Among World's Best Plane Crashes in Taiwan, Dozens Feared Dead Republicans Hold a Hearing on IRS Lost Emails Raw: Mourners Gather As MH17 Bodies Transported Robot Parking Valet Creates Stress-free Travel Raw: Fight Breaks Out in Ukraine Parliament Disabled Veterans Memorial Nearing Completion
Twitter Updates
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Stocks
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Business Marquee