EconomicCrisis.US

A handful of factors threaten the strength of the U.S. economic recovery this year, like U.S. government spending and high unemployment, leading many to wonder just how well the country’s economy will fare in 2011.

The U.S. Commerce Department reported last month that U.S. gross domestic product (GDP) growth slowed in 2011′s first quarter to 1.8%, down from 3.1% at the end of 2010. High gasoline prices and rough winter weather combined to drag down GDP.

The news came a day after U.S. Federal Reserve Chairman Ben Bernanke held the first-ever Fed press conference and said he expects the U.S. economy to grow at a rate of 3.1% to 3.3% this year (down from the 3.4% to 3.9% previously projected).
Read the rest of this entry »

Last month, the feds said that in the fourth quarter of 2010 the U.S. economy grew 3.1 percent, up from 2.8 percent as initially thought. Feeling any richer? If you’re like most people, you probably find it hard to say. That’s because even per capita measures of GDP are a poor measure of how someone is faring economically. It doesn’t tell you how any additional income resulting from faster growth is distributed among the rich, poor and all points in between. Nor does GDP tell you if gains come from higher consumer spending on, say, handguns, as financially strapped towns and cities cut back on policing.
Read the rest of this entry »

Consumer spending in the U.S. rose more than forecast in February as incomes climbed, helping to bolster the expansion in the world’s largest economy.

Purchases increased 0.7 percent, the most since October, after advancing 0.3 percent the prior month, Commerce Department figures showed today in Washington. Incomes increased 0.3 percent, less than projected, and the Federal Reserve’s preferred measure of inflation accelerated.

The U.S. added jobs for the sixth consecutive month in February and the unemployment rate fell to the lowest level since April 2009, helping cushion Americans from higher food and fuel prices. Spending is contributing to the recovery, which Fed policy makers say is on a “firmer footing.”
Read the rest of this entry »

Harvard University economics professor Martin Feldstein said the U.S. economy has cooled at the start of this year as consumers cut back on spending amid higher gas prices and a decline in housing wealth.

“There is a mixed picture now in terms of how much the economy is on track,” Feldstein said in an interview on Bloomberg Television’s “InBusiness With Margaret Brennan.” Growth “started slowing down toward the end of the fourth quarter. The January numbers are not very good at all.”

Feldstein cited less-than-forecast consumer spending in January, continuing monthly declines in U.S. housing prices and weakness in industrial production. While fourth-quarter growth was bolstered by consumers spending more after a rise in the stock market, those gains came as the personal savings rate fell, he said.
Read the rest of this entry »