A pair of new reports surfaced this week casting a dim light on the nation’s economic recovery, which even optimistic administration supporters have labeled as “fragile,” among other things. The first indicator comes from the nation’s economic growth, which was already borderline at roughly 3%. After today, three might start looking pretty good.
WASHINGTON (MarketWatch) — The U.S. economy slowed markedly in the first quarter and inflation accelerated, clear evidence of the double whammy on the economy from higher gasoline prices.
In its first estimate Thursday, the Commerce Department said gross domestic product rose at a 1.8% annual rate between January and March, slower than the 3.1% pace in the prior three months.
Economists polled by MarketWatch had expected a slightly weaker 1.7% growth rate.
The report cites a combination of factors including lethargic consumer spending, reflecting decreased confidence combined with declines in federal defense spending and cash strapped states tightening their belts as well. Disturbing enough news by itself, but it turned into a double whammy with the revised job numbers which came out on the same day.
New applications for U.S. unemployment benefits jumped last week to the highest level in three months, potentially a sign that recent improvement in hiring trends may have stalled.
The number of people who filed initial requests for jobless benefits climbed 25,000 to a seasonally adjusted 429,000 in the week ended April 23, the Labor Department reported Thursday. The last time claims were that high was in late January
Avoiding the use of the “u word” is a bit easier this month. The report shows that hiring is still continuing, though at a slower pace than would be needed to establish a robust recovery. One factor mentioned is that some of the discouraged workers may be starting to come back into the work force, even as more people find themselves filing new unemployment claims.
Either way, supporters of the President’s economic recovery plan (I know… I know… don’t ask) need to hope that this is simply a blip on the recovery radar. Numbers like these only add fuel to the fire as the Republican presidential hopefuls gear up for the summer campaign season. But, if nothing else, there should be more openings for vendors to sell cold drinks and hot dogs to people standing in long lines.